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.
However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale. There have been complaints that builders are not passing on the ITC benefit to consumers by way of reduction in the price of the property after the rollout of GST, following which the GST Council had set up a ministerial panel to suggest ways to boost realty sector.
Other members of the committee are West Bengal FM Amit Mitra, Kerala FM Thomas Isaac, Assam FM Himanta Biswa Sarma, Punjab FM Manpreet Singh Badal, Goa Panchayat Minister Mauvin Godinho, Karnataka FM Krishna Byre Gowda and Arunachal Tax and Excise Minister Jarkar Gamlin.
The panel is also expected to review tax rate on 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 February 20. Currently, a state-organised lottery attracts 12 per cent GST while a state-authorised lottery attracts 28 per cent tax.