New GST Regime for Real Estate - Council approves 15% cap for commercial space
Published: Mar 19, 2019
By TIOL News Service
NEW DELHI, MAR 19, 2019: AS expected the GST Council today approved the recommendations of the Joint Committee of Fitment & Law Panels, relating to the real estate sector. The new tax rates were decided at the last Council meeting and what was to be approved today was only whether to make it optional for the existing on-going residential projects and what should be the commercial component in a residential project. As explained in the Cob(Web) Column last week, the Council has given its nod for 15% commercial space and also made it optional for the developers to choose between the old rates with ITC and the new rate for the on-going projects. This largely means that all new projects from April 1, 2019 will have to compulsorily go for the new GST tax regime.
As regards the inward supplies, the Council has approved the 80% component of all supplies to be necessarily from GSTN-registered suppliers. A Developer will now have the option to receive 20% of all supplies from unregistered suppliers and if this exceeds the threshold the developer will be liable to pay GST under RCM mechanism.
While briefing the media persons the Revenue Secretary said that if developers raise the price of flats, the Department would not hesitate to invoke anti-profiteering provisions of the GST laws.