Accordingly, the council has decided that builders can pick between paying 12% for non-affordable houses with ITC benefits or 5% without the tax rebates for under-construction houses. Likewise, for affordable housing projects, builders can choose between 8% with tax rebates or 1% without it, the ministry said in a press note released on Tuesday evening.
The new rates, without ITC benefits, will apply for all projects that begin construction only after April 01, 2019.
In its last meeting on February 24, 2019, the council had lowered the GST rate to 1% from 8% for affordable houses and to 5% from 12% for other houses.
The new rates will kick in from April 01, 2019, but builders will not be eligible to claim ITC benefits after the lower duties come into force, the ministry added.
Builders will have to select between the two sets of rates for projects that are still under construction as on April 01, 2019 within a specified time frame, which will be notified later after discussing with states.
“The GST Council has said a reasonable time should be given that would be decided in the next few days in consultation with the states, whether it would be 15 days or one month,” the ministry said.
The change to the new rates and rules will not have any revenue implications given that property is not expected to go up because of the changed system. If the prices change significantly, the GST anti-profiteering body will examine it, the ministry said.