New Delhi, The GST Council, which met briefly through video-conference on Wednesday, will next be meeting on Sunday to take up real estate issues.
Meanwhile, the Council has extended the deadline to file 3B returns by two days. GSTR-3B is a monthly summary return.
“GST Council will take up the real estate issues on Sunday and the Council extends the deadline of 3B returns by two days,” Finance Minister Arun Jaitley announced after Wednesday’s meeting.
In the brief meeting, the Council had differences over issues of housing and lotteries, and official sources said lotteries still have not reached a level where discussions can take place.
The real estate sector is looking for GST intervention to come out of the slump it is seeing over the past few years.
A Group of Ministers headed by Gujarat Deputy Chief Minister Nitin Patel, which has favoured 3 per cent tax, down from 8 per cent, on the affordable housing category has submitted its report to the GST Council for decision by Sunday.
During the interaction, Punjab Finance Minister Manpreet Badal pointed out that land is a state subject and so cannot be included in the GST, while the Bihar representative said it was in principle in agreement with the report, but wanted a lower rate of 1 per cent on small businesses operating from a 10 per cent carpet area in residential areas.
Delhi, Kerala, West Bengal as well as some states ruled by the opposition Congress asked for a physical meeting and not a video conference since the issues under consideration were too important.
They said they could not announce any schemes related to real estate, since the Election Commission’s model code of conduct will be applicable soon.
The Council in its meeting on Sunday may also consider reducing tax on cement from 28 per cent to 18 per cent to boost the realty sector.
The proposed GST cut in cement and the GoM report are on the agenda of the GST Council meeting on Sunday, sources said, adding the government is looking at the housing sector closely ahead of the elections.
Sunday’s meeting may also change the definition of affordable housing to accommodate more poor people under 3 per cent tax rate.
Currently, affordable houses are defined up to 50 square metres of carpet area, which is likely to be increased to 80 square metres to include more people in the category.
Both developers and prospective home buyers are expected to gain from this move.
The panel set up to look into GST-related issues of the real estate sector is also said to have recommended GST for under-construction residential properties at 5 per cent, down from the current 12 per cent.
And the government is in the process of handing out a big pre-election bonanza to property developers and buyers by reducing GST on under-construction houses, from 12 per cent to 5 per cent.
But claiming input tax credit (ITC) would no longer be possible on such transactions.
Under-construction houses currently attract 12 per cent GST and 6 per cent stamp duty and registration.
GST is currently levied at 12 per cent on premium housing and 8 per cent on affordable housing on payments made for under-construction properties, where completion certificate has not been issued at the time of sale.
No GST is charged if a property is bought after the issue of completion certificate.
GST on affordable housing, meanwhile, will only be 3 per cent.
The GST Council meeting is expected to take up and pass these proposals.
