Providing relief to all the builders, developers of under-construction residential buildings across Delhi-NCR, the Goods and Services Tax (GST) Council has allowed them the option to pay GST at old rates in order to claim tax rebates on inputs such as steel and cement.
This was announced by the revenue secretary, Ajay Bhushan Pandey, in the council's 34th meeting held Tuesday. However, he added that builders, who want to pay according to the new GST rates, will have to forgo any input tax credit.
The GST Council has also decided the builders will have to purchase 80 per cent of the inputs and input services from registered persons to avail of the new rates.
"The decision to exercise the option would be taken by the real estate developers and not by consumers or buyers," Pandey stated.
Pandey said that builders may opt for the old and new rates for different buildings in the same project, depending on the commencement of the construction. "A reasonable time for the transition would be given to developers in consultation with states," he added.
Besides, the council has decided to treat projects with up to 15 per cent commerical space as residential property for the purpose of taxation.
"Tax treatment in such cases may need to be analysed in detail," he told City Spidey.
The tax rates were slashed by the council in its previous meet, held on February 24 from 8 per cent to 1 per cent on affordable residential houses and from 12 per cent to 5 per cent on other housing projects. The objective for the cut was the fact that some fraudulent builders were not passing on the benefit of tax rebates to their buyers.
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