Un­der-con­struc­tion flats may see a GST rate cut

HT Estates - - FRONT PAGE - Press Trust of In­dia let­[email protected]­dus­tan­times.com

NEW DELHI: The GST Coun­cil is slated to meet on Jan­uary 10 to dis­cuss low­er­ing GST on un­der­con­struc­tion flats and houses to 5 per cent, as well as hik­ing ex­emp­tion thresh­old for small and medium en­ter­prises. The coun­cil, in its pre­vi­ous meet­ing onDe­cem­ber22,2018, hadra­tionalised the 28 per cent tax slab and re­duced rates on 23 goods and ser­vices.

“The next meet­ing is sched­uled for Jan­uary 10,” an of­fi­cial told PTI.

This would be the 32nd meet­ing of the GST Coun­cil, which is chaired by Fi­nance Min­is­ter Arun Jait­ley and com­prises his state coun­ter­parts.

Brief­ing re­porters af­ter the re­cent coun­cil meet­ing, Jait­ley had said that the next meet­ing would con­sider ra­tio­nal­i­sa­tion of tax rates on res­i­den­tial prop­er­ties and rais­ing the thresh­old limit for MSMEs from the cur­rent Rs 20 lakh.

Also, the coun­cil would con­sider a com­po­si­tion scheme for small sup­pli­ers, apart from dis­cussing levy­ing a calamity cess as well as GST rates on the lot­tery.

The GST Coun­cil is likely to con­sider low­er­ing GST on un­der-con­struc­tion flats and houses to 5 per cent, an of­fi­cial said.

Cur­rently, the Goods and Ser- vices Tax (GST) is levied at 12 per cent on pay­ments made for un­der-con­struc­tion prop­erty or ready-to-move-in flats where com­ple­tion cer­tifi­cate has not been is­sued at the time of sale.

How­ever, GST is not levied on buy­ers of real es­tate prop­er­ties for which com­ple­tion cer­tifi­cate has been is­sued at the time of sale.

An of­fi­cial said that this 12 per cent GSTratei­de­ally would­have been par­tially off­set by way of taxes paid on in­puts by builders and­hencethe­ac­tual in­ci­dence of GST on un­der- con­struc­tion home buy­ers would have been around 5-6 per cent. How­ever, builders are not pass­ing on the in­put tax credit (ITC) ben­e­fit to con­sumers.

“One of the pro­pos­als be­fore the coun­cil is to lower the GST rate to 5 per cent for builders who pur­chase 80 per cent of in­puts from reg­is­tered deal­ers,” an of­fi­cial said.

Also the re­port of group of min­is­ters look­ing into the con­cerns of MSMEs un­der the GST regime would be taken up for con­sid­er­a­tion.

Cur­rently, busi­nesses with a turnover of up to Rs 20 lakh are ex­empted from GST. The Coun­cil could con­sider hik­ing the thresh­old to Rs 75 lakh for only MSMEs.

Be­sides, the coun­cil would con­sider com­po­si­tion scheme­for small sup­pli­ers, since it felt that the num­ber of small ser­vice pro- viders get­ting reg­is­tered un­der GST was not on ex­pected lines.

“An in-prin­ci­ple unan­i­mous de­ci­sion was taken that a com­po­si­tion scheme be framed for small ser­vice providers. The thresh­old and com­po­si­tion charge would be de­cided in the next meet­ing,” Jait­ley had said on De­cem­ber 22.

With re­gard to GST on the lot­tery, cur­rently, state-or­gan­ised lot­tery at­tract 12 per cent GST, while state-au­tho­rised lot­tery at­tracts 28 per cent.

A fi­nal view would be taken as to whether the sta­tus quo should con­tinue onGSTon­th­elot­teryor if there is a scope to tweak it.

Also, a view on levy­ing calamity cess un­der GST would be dis­cussed by the coun­cil.

Bi­har Deputy Chief Min­is­ter Sushil Modi led-group of min­is­ters (GoM) had in Oc­to­ber had de­cided to seek states’ views on whether a state-spe­cific or a na­tion­wide ‘dis­as­ter tax’ should be levied un­der the GST.

The GST Coun­cil, the high­est de­ci­sion-mak­ing body of the new tax regime, had in Septem­ber de­cided to set up a seven-mem­ber GoM to con­sider a cess for Ker­ala flood re­ha­bil­i­ta­tion.

“The next GST Coun­cil meet­ing within 3 weeks of the last meet­ing clearly shows the proac­tive ap­proach of the govern­ment to­wards con­cerns of the in­dus­try and to re­solve them at the ear­li­est,” EY Tax Part­ner Ab­hishek Jain said.

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