The GST Council extended the deadline by 10 days till May 20, allowing realty firms to opt for the old GST rate. This would also include an input tax credit for ongoing projects or shift to new lower tax rates.
The GST Council, headed by Finance Minister Arun Jaitley and comprising state counterparts, had earlier allowed real estate players to shift to 5% GST rate for residential units and 1% for affordable housing without the benefit of input tax credit (ITC) from April 1, 2019.
For the ongoing projects, builders have been given the option to either continue in 12% Goods and Services Tax (GST) slab with ITC (8% for affordable housing), or opt for 5% GST rate (1% for affordable housing) without ITC and communicate the same to their respective jurisdictional officers by May 10.
The GST Council tweeted – “The date for exercising the option for residential real estate project to either stay at old GST rate (8 per cent or 12 per cent with ITC) or to avail new GST rate (1 percent or 5 percent without ITC) is being extended to May 20, 2019, from May 10, 2019,”.
The Central Board of Indirect Taxes and Customs (CBIC) has given the real estate companies a one-time option to choose either of the tax rates. Once a realty developer makes a choice, he won’t be allowed to modify it later.
If the realtors do not exercise the option by May 20, they will be covered under the lower tax rate of 5% and 1% with effect from April 1, 2019. And, the realtors will not be entitled to avail ITC.