The Prime Minister's Office & Finance Ministry are in support of a big GST rate cut on housing and are striving to build agreement with states to push this through at the next GST Council conference on December 22.
The intent is to be consumer-friendly and bring home consumers back to the business with a much lower GST rate.
The first plan is to cut the 12% GST on the housing to 8% and bring it at parity with low-priced housing under the Credit-Linked Grant Scheme of the Modi govt.
The second plan is far brighter. It is to slice GST on housing from 12% to 5%, but it does away with an input tax credit (ITC) for builders. The government, as well as the Director General of the Anti Profiteering Authority, has mentioned that a majority of builders have not lowered prices for home customers, despite claiming the advantage of ITC which helps in lessening the cost of the building. After noticing a comparable trend in F&B, the GST Council had decided to do away with ITC and had cut the GST rate to 5% for consumers.
"Housing has been the missing chink in the economy, and either of the two proposals will go a long way in reviving a market which remains battered for many years," said Rajeev Talwar, CEO & Director, DLF.
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