GST Council to clarify real estate concerns
The GST Council is likely to meet next week via video-conferencing to approve the rules related to under-construction buildings. It will clarify the grey areas governing the rule, according to a senior finance ministry official. In its last meeting, the council had reduced Goods and Services Tax (GST) rate for under-construction buildings from 12 percent to 5 and on projects under affordable housing from 8 percent to 1 percent.
However, there were many grey areas left, over which developers have been seeking clarification. The Central Board of Indirect Taxes and Customs (CBIC) met several real estate sector representatives last week to discuss these grey areas.“The next meeting will explain the issues over which the sector has been seeking an explanation. Also, the law committee of the council will approve the rules, which would be effective from April 1,” the official added.
Another important issue to be taken up by the council would be the relaxation of the 80 percent mandatory procurement from registered suppliers. “So far, the general consensus is that 80 percent procurement norm is going to make many dealers GST-compliant. So, the council is unlikely to relax this norm. Also, there is confusion over the rebuilt property. The council largely agrees that rebuilt property must be considered as the under-construction property itself. The final call will be taken at the meeting,” he added.
The government has released new return forms that businesses will have to file for paying GST from next financial year. Businesses that have an annual turnover of up to `5 crores have the option to file one of the three quarterly returns — Sahaj, Sugam, and Normal. The new returns would be implemented on a pilot basis from April 1 and will be made mandatory from July 1.