[REAL ESTATE ECONOMIC NEWS] Good morning, everyone. I’m Lee Jang Ho staff |
of Kamagroup Pvt. Ltd. Here I have an important news for real estate to share
with you which is as undermentioned.
As announced during the interim budget 2019, the GST Council has reviewed the Goods
and Services Tax (GST) rates on the real estate sector. Accordingly, the developers of
residential projects which are incomplete as on March 31, 2019, will get a one-time
option to either choose the old GST rates of 8% and 12% on affordable housing and
non-affordable housing, respectively, with input tax credit (ITC), or to shift to the new
1% and 5% rates, for affordable housing and non-affordable housing, respectively,
without the ITC.
With the input tax credit being taken away, there will be an immediate cost implication
for developers. However, it is up to the developers to decide if they want to clear their
existing inventory by adopting the reduced rate regime, or stick to the previous
arrangement should their profit margins be tighter and if they are confident of clearing
the inventory at higher GST rates to the end-user. “It is a business call that each developer
will have to make, as per their assessment of their own and market conditions and liquidity
conditions,” says Nimish Gupta, FRICS-MD, south Asia, RICS.
Kamagroup Pvt. Ltd.
Have a nice day.