No Further GST Exemption on Long-Term Land Lease: Group of Ministers

PANAJI: During the fourth meeting of the Group of Ministers (GoM) on boosting the real estate sector, held in Goa, a decision was made not to grant any additional exemptions on Goods and Services Tax (GST) for long-term land leases by private entities.

Sector-specific exemptions, such as those for tourism, were also ruled out. Goa Chief Minister Pramod Sawant hosted the meeting on Tuesday.

In attendance were Bihar Deputy Chief Minister Samrat Choudhary, Maharashtra Women and Child Development Minister Aditi Tatkare, Gujarat Finance Minister Kanubhai Mohanlal Desai, Kerala Finance Minister K N Balagopal, Punjab Finance Minister Harpal Singh Cheema, Uttar Pradesh Finance Minister Suresh Kumar Khanna, and central government GST officials.

According to a media statement issued post-meeting, the discussions focused on various issues concerning the real estate sector.

A key point was the debate over granting GST exemption on long-term land leases by private entities and sector-specific exemptions like those for tourism purposes.

After thorough discussions, the GoM reached a consensus that no further exemptions were necessary. GST will continue to be levied at the applicable rates, as stated in the release.

Other topics included the taxability of construction services supplied by cooperative housing societies to members in new or redevelopment projects.

This issue was also explored in depth during the meeting. The statement noted that “various perspectives emerged” and it was determined that more deliberation is needed, pending data collection from the states.

It was also decided that a Committee of Officers will examine these issues further, after acquiring the necessary information and data from the states, before a final decision is made at the next GoM meeting.

On the topic of reviewing the Rs 45 lakh value limit for defining an affordable residential apartment in metropolitan regions, the GoM resolved to seek input from Karnataka, West Bengal, Tamil Nadu, Uttar Pradesh, Maharashtra, and Delhi to form a consensus.

The matter of determining the value of land to calculate the cost of construction services for apartment sales was postponed for further review, as mentioned in the statement.

The next GoM meeting is expected to take place on October 25.