10 May 2019Posted By: Mudit Handa


Government Extends Deadline to opt for Old GST rate on Real Estate

The 34th GST council meeting had proposed the new GST rates applicable to the Real estate sector. The government had given approval to the new GST rates on the housing sector and had made them mandatory from 1st April 2019.

In this regard, the real estate builders, as well as the developers having GST registration, were provided with a one-time alternative to opt for one of the 2 tariffs, either the old or the new GST rates on housing.

The Ministry of Finance has also set the deadline for opting for the previous GST rates on real estate of 10th May 2019. The Government has now extended the due date to opt for the old GST rates on real estate till 20th May 2019

 

1. What will the old GST rate on real estate mean?

The 33rd GST Council meeting had made it very clear how the previous & revised GST rate would affect the real estate projects.

  • If the real estate developers having GST registration choose the old GST rate, i.e. 12% on under construction projects, they will be allowed the input tax credit (ITC).
  • However, if they opt for the new GST rate i.e. 5%, they won’t be allowed the ITC benefit.
  • Likewise, this rule applies to the affordable housing segment. If the old GST rate of 8% is selected, ITC shall be allowed, whereas if the revised Rate of 1% is selected, ITC shall not be allowed.

This can be well understood from the chart given below-

Particulars

Old GST rate (%)

New GST rate (%)

Affordable housing apartment

8

1

Other housing apartments

12

5

Input Tax Credit

Allowed

Not allowed

 

2. What if old GST rate not chosen till May 20?

The Government has now further extended the due date to choose between the old & new GST rates on real estate till 20th May 2019. The real estate developers having GST registration are supposed to make a choice between previous & revised rates latest by 20th May, otherwise, they will have to shift to the new GST rates.

Also, read the 

If you require any sort of guidance with respect to GST registration, please feel free to contact our business advisor at 8881-069-069.

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