Packing batteries with more punch
Indian researchers are working on cells that can store more energy, last longer
Come 2019, buying an under-construction flat will become cheaper. The Centre and the State governments are working to lower the Goods and Services Tax (GST) with some riders.
“Two options are on the table: The first option is levying 5 per cent without input tax credit (ITC) provided the builder establishes that he has purchased at least 80 per cent of material from a GST-registered supplier. The second option is 12 per cent with ITC,” a senior government official said.
If GST is lowered to 12 per cent, then the effective rate would be 8 per cent because of abatement on account of the cost of land.
The proposal will first be vetted by the Law Committee and the Fitment Committee before being placed before the next meeting of the GST Council, scheduled to be held next month, for a final decision.
At present, the normal rate of GST for the real estate sector is 18 per cent. However, the effective rate of GST payable on purchase of under-construction or commercial properties from a builder involving transfer of property in land or undivided share of land to the buyer is 12 per cent with full ITC.
It means GST is payable at the rate of 18 per cent on two-third of the amount of the property, one-third of the amount deemed as the value of the land or the undivided share of land supplied to the buyer.
The government claims that after accounting for ITC, the tax burden comes down on the builder and he can pass it on to the buyer. At the same time, no GST is applicable on ready-to-move-in or completed property.
Housing projects in the affordable segment such as Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of a State government, attract a GST of 8 per cent. For such projects, after offsetting input tax credit, the builder or developer, in most cases, will not be required to pay GST in cash as he would have enough ITC in his books of accounts to pay the output GST.
The government is working on changes to make the real estate sector attractive again. “Under-construction projects are facing twin problems. On the one hand, NBFCs are not able to lend, and on the other, people are waiting for projects to be completed as then there will be no GST,” the official said.
Growth of real-estate sector has a multiplier effect. It helps in the growth of allied industries such as building/construction materials, besides providing direct and indirect employment.
Harpreet Singh, Partner in KPMG, said the lower rate on the condition of procuring certain minimum percentage from registered dealers is a good proposal. It intends to achieve twin benefits of further reducing the tax cost along with formalisation of the sector.
Shishir Baijal, Chairman and Managing Director at Knight Frank India, said: “We are hopeful that there will be a positive outcome in the next committee meeting in January. This remains a long-standing demand of the residential sector and continues to remain a deterrent for prospective property buyers.”
Indian researchers are working on cells that can store more energy, last longer
To fix a broken bone, doctors often harvest another bone from the patient’s body or from someone else. It ...
Superconductors from IIScScientists at IISc Bangalore have invented a device with a nanocrystal structure ...
Engineering and construction giant L&T has won a licence from the Council of Scientific & Industrial ...
Will a stock continue its current trend or will it reverse? We tell you how you can read chart patterns to ...
Sensex and Nifty 50 saw selling interest on Friday and slumped; selling pressure could continue
Investors with a long-term horizon can consider this offer
Most AMCs have been sending out cryptic e-mails. We tell you how to read between the lines
In these isolated times when people yearn for a slice of the familiar, amateur and professional chefs are ...
With strokes of quirky humour, Partha Pratim Deb uses pulp, terracotta, glass and discarded cloth to create ...
Given the events in Washington DC on January 6, this week’s quiz is all about buildings that house or housed ...
While good writing wars against the cliché, television gives it a natural home
Digital is becoming dominant media, but are companies and their ad agencies transforming fast enough to make a ...
Slow Network, promoted by journalist-lyricist Neelesh Misra, pushes rural products and experiences
How marketers can use the traditional exchange of festive wishes meaningfully
For Fortune, a brand celebrating its 20th anniversary, it was a rude shock to become the butt of social media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor