GST on under-construction flats, affordable housing slashed by 7%

GST on under-construction flats, affordable housing slashed by 7%

1. The GST Council has decided that (a) Under construction properties priced over ₹45 lakh will attract 5% GST (Goods and Services Tax), instead of 12% (b) A residential property priced at ₹45 lakh or below will now be defined as “affordable” and taxed at 1% from 8% earlier.
2. However, builders will not be able to claim input tax credit (ITC) under the new GST rates. Input tax credit is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale. In other words, businesses can reduce their tax liability by claiming credit to the extent of GST paid on purchases.
3. GST (Goods and Services Tax) is an indirect tax that has replaced many Central and State taxes like excise duty, VAT and service tax. It is a single comprehensive tax levied on all goods and services produced in India as well as those imported from other countries.
4. Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. GST Council is a joint forum of the Centre and the States. It consists of the following members:(a) The Union Finance Minister is the Chairperson (b) The Union Minister of State, in-charge of Revenue of finance and c) The Minister In-charge of finance or taxation or any other Minister nominated by each State Government.