The group of ministers has recommended a reduction in GST on under-construction residential properties to 5 per cent from 12 per cent and affordable housing to 3 per cent from 8 per cent — but without input credit. (Shutterstock)A high-level ministerial panel’s recommendation to cut the GST on under-construction residential properties but, at the same time, do away with input tax credit may increase the price of affordable housing, analysts said. The group of ministers under Gujarat deputy chief minister Nitin Patel has recommended the reduction in the GST on under-construction residential properties to 5 per cent from 12 per cent and affordable housing to 3 per cent from 8 per cent — but without input credit. Analysts said the margin in affordable housing was low, and without input credit the builders would pass on the cost to consumers, which would increase the price of the house. M.S Mani, partner, Deloitte India, said “while restriction on input tax credits is an aberration in the GST framework, the reduction proposed in the rates for under construction property would bring it at par with the pre-GST scenario”.

Source: The Telegraph February 08, 2019 19:41 UTC