GST Council extends deadline for realty firms to opt for old GST rate till May 20

The GST Council Thursday extended by 10 days till May 20 the deadline for realtors to opt for old GST rates with input tax credit for ongoing projects or shift to new lower tax rates.

The GST Council, headed by Finance Minister Arun Jaitley andcomprising state counterparts, had in March allowed real estate players toshift to 5 per cent GST rate for residential units and 1 per cent foraffordable housing without the benefit of input tax credit (ITC) from April 1,2019.

   

For the ongoing projects, builders have been given theoption to either continue in 12 per cent Goods and Services Tax (GST) slab withITC (8 per cent for affordable housing), or opt for 5 per cent GST rate (1 percent for affordable housing) without ITC and communicate to their respectivejurisdictional officers the same by May 10.

“The date for exercising the option for residentialreal estate project to either stay at old GST rate (8 per cent or 12 per centwith ITC) or to avail new GST rate (1 per cent or 5 per cent without ITC) isbeing extended to May 20, 2019 from May 10, 2019,” the GST Council said ina tweet.

The Central Board of Indirect Taxes and Customs (CBIC) hasgiven the real estate companies a one-time option to choose either of the taxrates and once a realty developer chooses a particular tax rate for ongoingprojects he would not be able to modify it.

In case, realtors do not exercise the option by May 20, theywill be covered under the lower tax rate of 5 per cent and 1 per cent witheffect from April 1, 2019, and will not be entitled to avail tax credit oninputs.

AMRG & Associates Partner Rajat Mohan said builders arestill under the process of calculating the cost benefit analysis in relation totax change scenario.”Builders were facing challenges infinalising the roll over scheme to the new tax regime and in the light of newcircular on this matter, government in good faith has increased the date foropting,” he added.

Leave a Reply

Your email address will not be published. Required fields are marked *

three × 1 =