In a major relief to the realty firms, the 34th GST Council Meeting will meet today by Video Conferencing to frame realty rules.
The meeting had been approved by the Election Commission. As the date for Lok Sabha elections has been declared, there were reports that the meeting would violate the Code of Conduct rules.
The last GST Council meeting had suggested reducing the levy on under-construction residential projects to 5 percent without an input tax credit from the current 12 percent. In the same meeting, the Council had decided to lower the GST on the under-construction houses from 12% to 5% and for affordable housing from 8% to 1% without input tax credit (ITC) benefit.
However, on the important issue of transition of the existing under-construction projects, the Council had asked its fitment and the law committee to draft the rules and guidelines for a transition. The next meeting through video conference on Tuesday is expected to finalize the rules and regulations for the ongoing under-construction residential projects.
In the meeting, the council is likely to limit the usage of tax credits collected by builders and allow a concessional rate for up to 10 percent of commercial property such as shops in residential areas, expecting realtors to reduce prices. In February, the GST collections have been dropped to Rs. 97,247 crore from Rs. 1.02 lakh crore in the previous month.
