• Decisions taken by the GST Council in the 34th meeting held on 19th March, 2019


    Decisions taken by the GST Council in the 34th meeting held on 19th March, 2019


    Ø  Option for under construction projects

    ü Under Construction projects as on 31st March, 2019 shall have an option to choose old rates (effective rate of 8% or 12% with ITC) with input tax credit or new rates without input tax credit.

    ü If the option is not exercised within the prescribed time limit then new rates shall apply.


    Ø  Conditions for the new tax rates:

    ü Atleast 80% of the material to be procured from registered dealers. Further, on shortfall of purchases from 80%, tax shall be paid by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates.

    ü Input tax credit shall not be available.


    Ø  Applicability of new tax rates:

                    The new tax rates which shall be applicable as follows:

    ü 1% without input tax credit (ITC) on construction of affordable houses shall be available for:

    • Houses having area of 60 sqm in non- metros / 90 sqm in metros and value upto RS. 45 lakhs
    • Under construction affordable houses presently eligible for concessional rate of 8% GST (after 1/3rd land abatement)


    ü 5% without input tax credit shall be applicable on construction of:

    • Under construction houses other than affordable houses presently booked prior to or after 01.04.2019. For houses booked prior to 01.04.2019, new rate shall be available on instalments payable on or after 01.04.2019.
    • Commercial apartments having carpet area of not more than 15% of total carpet area of all apartments.


    Ø  Transition for ongoing projects opting for the new tax rate:


    ü Ongoing projects not been completed by 31.03.2019 shall transition the ITC in proportion to booking of the flat and invoicing done for the booked flat is available subject to a few safeguards.

    ü For mixed project transition of ITC shall be allowed on pro-rata basis in proportion to carpet area of the commercial portion.


    Ø  Treatment of TDR/ FSI and Long term lease for projects commencing after 01.04.2019


    Ø  Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer shall be exempted with the condition constructed flats are sold before issuance of completion certificate and tax is paid on them.

    Ø  Exemption can be withdrawn (limited to 1% of value in case of affordable houses and 5% of value in case of other than affordable houses) if flats sold after issue of completion certificate.

    Ø  Builder shall be liable to pay tax on TDR, FSI, long term lease (premium) on the date of date of issue of completion certificate.




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