GST council meeting: Realtors hail Modi government's decision to slash rates on under-construction, affordable house

The Indian realtors have hailed the Narendra Modi government's decision to slash GST from 12 per cent to 5 per cent on under construction house and 1 per cent on affordable houses. The industry insiders say the move would help revive the real estate sector, encourage buying activity, and make the real estate industry one of the key growth drivers of the economy via a boost in investment and employment.

Niranjan Hiranandani National President, National Real Estate Development Council (NAREDCO) told, “Industry lauds the GST rate cut on real estate to 5% on Non-affordable and 1% on affordable housing without Input tax credit as a welcomed and positive move which brings a big relief to the home buyers and helps to narrow down the demand mismatch gap. This announcement gives an impetus to the affordable housing and enthuses homebuyers to close the sale deals." However, the Naredco chairman expressed some disappointment over the GST on cement being left unchanged. "The GST rate on cement has not been reduced as was expected, at 28 per cent it remains among the highest taxed inputs for construction – and there will be no input tax credit, so developers will face a challenging time."

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Hailing the government move Manoj Gaur, Vice President, CREDAI — national chapter told, “GST council’s decision to reduce GST on affordable housing to 1% and of under construction properties to 5% from 12% is a welcome step for the entire sector. The recommendations are in sync with the government’s push for housing for all and also for the ongoing projects. These steps would surely ease up buying for home seekers, augmenting the demand in all segments.” 

Lauding the rate cut in affordable housing segment Gaurav Kasyap CEO, Cherry Hill Interiors told, "To promote the affordable housing, which has been a key focus area of the government and to cheer up the prospective buyer who are on the fence waiting for a change of policy regarding GST rate on under construction housing properties to make a home purchase more feasible and attractive for them. This would help revive the real estate sector, encourage buying activity, and make the real estate industry one of the key growth drivers of the economy via a boost in investment and employment."

Welcoming the Modi government move Tanuj Shori, Founder and CEO, Square Yards told, "Reducing the GST rate for under construction apartments to 5 percent would go a long way in providing level playing field to residential projects that are under construction and reducing the prices for the buyers. The reduction in GST rates for affordable houses to 1 percent would also help the government realize its 'Housing For All' move by 2022 and provide vivacity to the residential real estate market."