Housing for All and PMAY to get boost with reduction in GST under CLSS
CREDAI-MCHI President Mayur Shah welcomes the recommendations made by the GST Council in its meeting in January 2018.
This decision will give a boost to providing affordable housing to people of India under ‘Housing for All’ and Prime Minister Awas Yojna and other such programmes. The recommendations include the concessional rate of GST at an effective rate of 8 per cent from earlier 12 per cent to houses constructed and purchased under credit-linked subsidy scheme (CLSS) for the economically-weaker section, lower and mid-income group. CLSS scheme covers beneficiaries of up to an annual income of Rs 18 lakh per annum. Credit-linked subsidy, together with GST benefit, will fulfil the dreams of a large section of the population that aspire to own a home and will give a boost to the housing sector undertaking such affordable housing projects.
The GST council’s decision to extend concessional GST of 8 per cent to in situ slum rehabilitation project will help faster rehabilitation of slum dwellers and will encourage developers to participate in these schemes. CREDAI National also welcomes concessional rate of GST to those schemes where 50 per cent of FSI/FAR is used in building homes of carpet area not more than 60 sq m. In such schemes, flats or houses of carpet area up to 60 sq m will now be able to enjoy a reduced rate of GST at 8 per cent.
We also welcome the council’s decision to change the point of taxation with regard to the supply of development rights. This will enable closure of joint development or redevelopment projects, especially in metro cities. CREDAI also welcomes the simplification of GST, wherein the GST Council has clarified the applicability of 1/3rd land deduction on housing projects undertaken on leasehold land.