Injecting yet another booster to low cost housing, GST Council in its recent meeting recommended the effective GST rate of eight percent for houses under the Pradhan Mantri Awas Yojana (PMAY) that provides credit linked subsidy scheme (CLSS). Currently, houses under construction attract GST at the rate of 12% but it will now be down by 400 basis points to eight percent for affordable homes. One of the important recommendations is to extend the concessional rate of the GST of 12% (effective rate of eight percent after deducting one-third of the amount charged for the house, flat, etc. towards the cost of land or undivided share of land, as the case may be) in the housing sector to construction of houses constructed/acquired under the credit linked subsidy scheme,‖ said an official statement. The PMAY provided an interest subvention of 6.5 percent for a loan upto Rs.600,000 for the economically weaker section (EWS) and lower income group (LIG) till 2022. Shortly after that the Centre introduced two new middle-income group (MIG) schemes under the PMAY. These provide an interest subvention of four per cent and three percent, respectively, for home loans up to Rs.900,000 and Rs.1.2 million. The lowering the GST rates is likely to provide the much-needed fillip to the affordable housing sector as buyers will now be able to avail the interest subsidy under the scheme as well as get a lower concessional rate of GST of eight percent, said chairman of Anarock Property Consultants, Anuj Puri.
📅Published on:
30 January 2018
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