No GST On Flats That Have Completion Certificate: Finance Ministry
The finance ministry on December 8 clarified that buyers will not have to pay any tax for purchasing units that have already received a completion certificate under the new goods and services tax (GST) regime. However, the tax is applicable on sale of under-construction property or ready to move in flats where completion certificate is not issued at the time of sale, the ministry said.
"It is brought to the notice of buyers of constructed property that there is no GST on sale of complex/ building and ready to move in flats where sale takes place after issue of completion certificate by the competent authority," the ministry said in a statement.
On Feb 24, the GST Council has reduced the tax rate on affordable housing projects to 1 per cent with no ITC benefits for developers. For standard housing projects, the applicable GST rate will be 5 per cent. The new rates will be effective from April 1, 2019.
The ministry clarified that affordable housing projects of the government, including the Jawaharlal Nehru National Urban Renewal Mission, the Rajiv Awas Yojana, the Pradhan Mantri Awas Yojana or any other housing scheme of state governments, attract only one per cent GST.
The council also expanded the definition of affordable housing so that more homebuyers could avail of the benefits under the new tax regime. Now, flats worth up to Rs 45 lakh, measuring 60 square metre (sqmt) carpet area in metro cities would be considered affordable homes. In non-metro cities, units measuring 90-sqm carpet area worth up to Rs 45 lakh would fall under the same category.
With inputs from Housing News