The GST Council on Tuesday decided the rules for the implementation of the tax changes decided to be imposed from 1st April 2019.
The Council upheld the decision to levy GST at 1% for residential properties falling under the affordable housing segment while at 5% without ITC on residential properties other than the affordable housing segment. However, it postponed the decision on the Maharashtra government's demand to change the qualifying benchmark for affordable housing from Rs. 45 lacs to Rs. 70 lacs in Mumbai and Rs. 60 lacs in Pune.
The Council further said that 80% procurement of materials should be from a registered dealer. It also announced that up to 15% of commercial space to be treated as residential property for GST purpose. Any shortfall in purchases will attract tax at a rate of 18%, while the tax on cement purchased from an unregistered person shall be charged at 28%.
Builders will get a one time option to continue paying tax at the old rates for projects that are not completed by 31st March 2019 or move to the new rate.