Old GST rates can be requested until May 10 – GST COUNCIL

By Abhay Harish Shah , Realty Quarter

The news which reflected about new Goods and Service Tax (GST) would be reduced from 12% to 5% by April 1st has been updated by GST council.

According to the latest news, the GST council has given an option to all Real estate companies to communicate to their respective jurisdictional officers whether they want to continue with the old GST rates with an input tax credit, failing which they will be deemed to have migrated to new tax rates.  They have time until May 10th.

The GST council explains that the Real Estate Business Owners have two options to select from viz: To select old rates of 12% for residential and 8% for affordable housing with Input Tax Credit (ITC) benefits or they can opt for new tax rates of 5 per cent for residential units and 1 per cent for affordable housing without the benefit of adjusting the credit on inputs used during construction.

This is a onetime option given by the Central Board of Indirect Taxes and Customs (CBIC) and already notification has been intimated to the real estate companies.

Also, this one time option is available for them whose project is already started. If realtors don’t select either of the options, then it will automatically be considered under the new tax rate and will not be entitled to avail tax credit on inputs.

Meanwhile, In the interim, in a different notice, the CBIC has asked the realtors that will move the new rates to set up their books of records concerning ITC and reimburse the over-utilized credit, if any, to the administration in 24 installments.

CBIC also demanded a state-wide enrollment. Now, this will burden the real estate businesses to provide project wise break-up of procurement and outward supplies in relation to re-calculate admissible tax credits.