Published: Mon, December 24, 2018
Markets | By Erika Turner

GST Council May Consider 5% Tax Rate On Under-Construction Houses

GST Council May Consider 5% Tax Rate On Under-Construction Houses

The council rationalised the 28 percent slab by bringing down the tax rate on seven items in the highest tax bracket, thereby leaving only 28 items in the slab.

Second-hand tyres, video games, monitors and television screens up to 32 inches, and lithium battery power banks will now attract 18 per cent GST.

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- 33 items have come down from 18% to 12% & 5% as they are common man's consumption goods.

The new GST rates will come into effect from January 1, 2019. Today's GST rate reduction will have an overall impact on revenue of Rs 5500 crore, said the finance minister. GST rates on movie tickets have been changed earlier also. GST on movie tickets costing up to Rs 100 cut to 12 per cent, from 18 per cent, tickets over Rs 100 to attract 18 per cent GST, against 28 per cent earlier.

GST on solar power generating plants and renewable energy items have also been reduced, he added. Furthermore, he stated that the services supplied by the banks to Jan-Dhan account holders will also be exempted from GST.

"I have already given my suggestion to the upcoming GST Council because that (rate) is decided by all the states together", PM Modi said in his address at a function in Mumbai.

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We are absolutely committed to that mission and nothing will deter us from doing what we think is the right thing to do. On Wednesday, Fed officials issued an updated set of forecasts that showed that they expect two rate increases in 2019.

- The GST on Auto parts has been reduced from 28% to 18%, according to Zee Business TV report.

"In many states there is improvement (collection), but we have a very stiff target".

The recent defeat of the BJP in three states has altered the composition of the Council, and the central ruling party will not be able to push its agenda unless a few regional parties back it.

The GST Council is likely to consider lowering GST on under-construction flats and houses to 5% in its meeting next month, an official said. "If they are brought down from 28 percent to 18 percent implications are of 33000 crore".

"One of the proposals before the Council is to lower the GST rate to 5% for builders who purchase 80%of inputs from registered dealers", an official said. "This measure will bring down the final price to consumer and is expected to encourage higher demand/consumption with consequent boost to manufacturing sector", Deloitte India Senior Director R. Muralidharan said in a statement. "Except for 34 items, all other will come down to 18% and below", said Narayanswamy.

"The reduction in GST rates announced would certainly bring economic benefits inter-alia political interpretations".

The Finance Ministry has time and again asked real estate dealers to pass on GST rate cut benefits to buyers, but to no avail.

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