GST Council makes homebuyers wait as decision on real estate tax cut deferred to Feb 24

The Good and Services Tax (GST) Council has deferred the decision to consider a reduction in tax on under-constructed buildings and lottery till Sunday.

33rd GST Council meet took place via videoconference. (Image: Ministry of Finance/ Twitter)

GST Council Meet: The Good and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, has deferred the decision to consider a reduction in tax on under-constructed buildings and lottery till Sunday. The council has also extended the deadline for businesses to their sales return for January till Friday. Briefing media after the 33rd and the last GST Council meet before 2019 Lok Sabha polls, FM Jaitley said that because of the rush of filing of returns, the due date has been extended till February 22 for all states; and February 28 for Jammu and Kashmir. The due date for filing summary sales return - GSTR-3B - is February 20. The meeting took place via videoconference. It is also reported that several states wanted a physical meeting for this agenda and thus the council decided to postpone the meeting and the decision remained inconclusive. With regard to GST rate on under-construction housing properties, Jaitley said, since certain states wanted a physical meeting for this agenda, hence, the Council would meet again on February 24 to take a decision. “Today's meeting has been adjourned till Sunday,” Jaitley said, adding discussion on real estate and the lottery will continue. The GST council today was expected to take a call on the reduction of tax on under-construction residential properties at 5 per cent, down from 12 per cent currently. The council was also expected to endorse a tax of 3 per cent on the affordable housing category, down from 8 per cent. On the affordable housing segment, it was suggested that GST should be slashed to 3 per cent, from 8 per cent. Currently, GST is levied at 12 per cent with an input tax credit (ITC) 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. The effective pre-GST tax incidence on such housing property was 15-18 per cent. The panel was also expected to review tax rate on the lottery and favoured a uniform GST rate of either 18 per cent or 28 per cent. A final call on this would be taken by the GST Council at its meeting on Sunday. Currently, a state-organised lottery attracts 12 per cent GST while a state-authorised lottery attracts 28 per cent tax.