- Cement presently falls under the 28% GST levy, but the government is considering putting it under lower GST bands.
- A decision was postponed to Saturday as the states & the center did not want to lose INR 13,000-crore annual revenue.
The Government of India is reportedly considering to lower the Goods & Services Tax (GST) on cement, which currently falls under the 28% GST levy, before next year’s general elections.
Reports cite, it would be greatly lowering the financial burden on home buyers choosing to purchase under-construction flats to the 5% levy when the GST Council next meets in January 2019.
According to a report by The Economic Times, presently, a 12% GST is levied on purchases made of properties that are under construction or flats that are ready-to-move-in where its completion hasn’t been issued at the time of its sale. However, GST is not applied on buyers that purchase real-estate properties where the completion certification hasn’t been issued at the time of the property’s sale.
Reports claim, the decision was postponed as the states as well as the center did not want to be hit by an INR 13,000-crore annual revenue. Meanwhile, in case of residential units that are currently under construction a decision has been made in principle. However, the modalities related to the decision have yet to be finalized.
Sources familiar to the matter cite, the Council is considering two options with one of the option being the payment of 5% GST without providing the benefit to builders of input tax credit. However, to keep cash transactions in check the builders would have to ensure that 80% of the building materials have been acquired from GST payment registered entities. The second option being the payment of 12% GST however with an input tax credit, helping reduce actual incidence.
According to reports, a final decision would be reached based upon inputs from GST authorities working at the center as well as the states.