Government may announce big relief for home buyers next week: GST meet

New Delhi, Feb 13 The Group of Ministers (GOM), set under Gujarat Deputy Chief Minister Nitin Patel, is all set to meet on February 20 and make a large number of announcements in regards to the housing sector,

The ministerial panel was set up a month ago to analyse tax rates and issues/challenges being looked by the real estate sector under the Goods and Services Tax (GST) regime.

Sources said that the GOM may consider proposition of a composition scheme for the real estate sector under the goods and services tax (GST).

In its meeting, the GOM may also suggest on another GST equation for bigger carpet area under affordable housing.

The GoM may suggest 5 percent GST for under development properties and3 percent GST for affordable housing sector.

According to sources, the GST on said classification of lodging will be forced without Input Tax Credit. The GoM examined a few issues identified with home purchasers in its first gathering in Gujarat.

At present, the GST is exacted at 12 percent on installments made for under-development property or prepared to-move-in pads where consummation endorsement has not been issued at the season of offer.

However, GST isn't levied on buyers of real estate for which completion certificate has been issued at the time of sale.

Before GST came into power, under-development housing projects attracted 4.5 percent service tax and a value added tax of 1-5 percent. The rates were separate in every state however.