Home buyers may be in for a relief with Finance Minister Piyush Goyal announcing that the GST Council will soon consider changing the GST rate structure on housing. Piyush Goyal said that the GST Council will soon convene its next meeting, in which it will consider GST rate structure on real estate.
Further, ostensibly in an effort to revive under-construction housing projects stuck for need of financing, Piyush Goyal said that he wants banks to meet real estate sector in two weeks. A Group of Ministers headed by Gujarat Deputy Chief Minister Nitin Patel has suggested a 5% GST rate on buildings under construction. However, the GoM has not taken a call yet on the issue of making input tax credit available to property developers under the new proposed structure.
Speaking at the CREDAI YouthCon 2019, New Delhi, Finance minister assured that a final decision on GST rate for the real estate sector will be taken, in the upcoming GST Council meeting. The reforms would usher a new era of transparency and help make the sector robust, which could immensely benefit the people of India, he said.
The construction and real estate sector is vital for the creation of jobs in the economy, as it creates employment in a number of sectors like steel, cement, and other related jobs. However, the sector suffers from a credibility deficit among home buyers and should therefore work towards improving its image, said Prime Minister Narendra Modi while speaking at the event in New Delhi.
Acknowledging its contribution, the Prime Minister also pointed out towards the enactment of The Real Estate (Regulation and Development) Act, Benami Act and demonetisation, all aimed at comforting the aspirational customer and bringing transparency in the real estate sector.
Narendra Modi’s NDA government has recently taken steps to give an impetus to the real estate sector. Piyush Goyal, in Budget 2019, extended tax sops for affordable home developers and removed tax on notional rent for a second housing unit as well as unsold units. He also extended the benefits under Section 80-IBA of the Income Tax Act for one more year — to housing projects.