While to boost the ailing real estate sector, the government in February this year reduced GST on affordable housing to 1% from the earlier 5% and for under-construction flats it has been made 5% from 12%, the decision regarding GST on under-construction flats lies with the builder.
Also, the decision has been taken to withdraw the benefit of ITC claim on input materials such as cement, paints etc. as builders were found to be not passing the benefit to consumers.
And now in a 16-page report, the government as part of the FAQs as to when can the builder drift to 5% or 1% GST rate structure. Herein it has been said that in a case when you have already paid 40% of the flat's value by March 31, then the new rates can become applicable. However, under a case, when the builder continues to take ITC benefit, the benefit of lower GST will not be applicable for real estate purchasers.
And for this builders have been given option until Friday to make a one-time move else they would be automatically be shifted to a new rate regime.