MUMBAI, January 25, 2018 /PRNewswire/ --
The GST council's decision to reduce the applicable GST rate for home purchases under the CLSS-PMAY (Credit Linked Subsidy Scheme-Pradhan Mantri Awas Yojana) to 8% is the latest measure to ease demand side constraints, especially in the low cost, EWS and affordable housing segments. This concession has also been extended to apartments up to 60 sq mtrs carpet area and given infrastructure status as per the affordable housing definition. The scheme is also extended to the MIG-I and MIG-II categories where higher apartment sizes were recently notified by the government, thus having an impact on this housing segment as well.
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"The potential buyers across these segments are extremely price sensitive and are impacted by even a small change in their overall outlay towards home purchases. Therefore this drop in the applicable GST coupled with the interest subsidy will allow significant savings on the purchase of homes. For the developers too, this drop in GST rates will be of great benefit as the higher Input Tax Credit that they can avail on construction materials and services can be used to offset the GST that a buyer may pay, further incentivising pricing of homes and buying activity," says Ramesh Nair, CEO & Country Head, JLL India.
"Further, developers would have loved to see the GST on input costs of construction and material for affordable and priority housing coming down as well. It currently ranges from 18% - 28% making it restrictive to create low cost housing in high demand areas. We look forward to the budget to see if the same will be addressed. Such an SOP will give new lease of life to affordable housing and LIG Housing," added Nair.
The Council, in its meeting held on January 18, had decided to extend the concessional rate of GST on houses constructed / acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS) / Lower Income Group (LIG) / Middle Income Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (Urban) and low-cost houses up to a carpet area of 60 square metre per house in a housing project which has been given infrastructure status, as proposed by Ministry of Housing & Urban Affairs, under the same concessional rate.
All inputs used in and capital goods deployed for construction of flats and houses attract GST of 18% or 28%. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8% (after deducting the value of land).
About JLL India
JLL is India's premier and largest professional services firm specializing in real estate. With an extensive geographic footprint across 11 cities (Ahmedabad, Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and a staff strength of 9,500, the firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, analytics, consultancy, transactions, project and development services, integrated facility management, property and asset management, sustainability, industrial, capital markets, residential facing services, hotels, health care, senior living, education and retail advisory. The firm was awarded the Property Consultant of the Decade at the 10th CNBC-Awaaz Real Estate Awards 2015, Euromoney Rankings 2017, ET Great Place to Work ranking 2017 and the Best Property Consultancy in India at the International Property Awards Asia Pacific 2016-17. For further information, please visit http://www.jll.co.in.
Media Contact:
Piyali Dasgupta,
[email protected]
+91-9833571204,
Associate Director,
PR & Media Relations,
JLL India
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