GST on real estate: Transition is key

Tomorrow's GST Council meeting, which is expected to finalise the transition provisions, will be keenly watched

Both consumers and builders were delighted with the reduction in the GST rates announced by the GST Council in a recent meeting. The reductions were quite impressive as the erstwhile rate of 12 per cent was brought down to 5 per cent and more importantly, the reduced rate of 8 per cent applicable to affordable homes was slashed to 1 per cent. There was expectedly a condition that the reduced rates would disentitle builders from taking input tax credit (ITC) on their purchases.

The condition that ITC cannot be availed of by builders has led to some predicting an increase