The GST Council Tuesday approved a transition plan for the implementation of new tax structure for the real estate sector with applicable rules for housing units being applicable from April 1, 2019.
The Council also decided that under construction projects will have an option to shift to new rate. The GST Council in its 33rd meeting on February 24, 2019 had come up with new rates for housing units. GST will be levied at effective rate of 5% without ITC on residential properties outside affordable segment, while GST shall be levied at effective GST of 1% without ITC on affordable housing properties.
The new rules are expected to specify under what circumstances sale transactions initiated in the current tax regime but concluded after April 1, will be eligible for Input Tax Credit on taxes paid on raw materials and services.