GST Council has given go-ahead for new ITC Rules for Real Estate, New Rules to be applicable from April 2019

GST Council has given go-ahead for new ITC Rules for Real Estate, New Rules to be applicable from April 2019: GST Council has given go-ahead for much awaited new ITC rules for Real estate sector in its 34th meeting held on March 19, 2019. GST Council in its 34th GST Council Meeting has decided that under construction projects will have an option to shift to new rate. The GST Council in its 33rd meeting on February 24, 2019 had come up with new rates for housing units. GST will be levied at effective rate of 5% without ITC on residential properties outside affordable segment, while GST shall be levied at effective GST of 1% without ITC on affordable housing properties. GST Council in its 34th GST Council Meeting also held that 80% procurement of materials should be from registered dealer. It also announced that up to 15% of commercial space to be treated as residential property for GST purpose. The Council also decided that reversal of input tax credit to be done on propotionate basis and the time limit for transition to new rates will be discussed with the states. Below are the Key takeaway from GST Council Meeting: 1. GST rates for new Real estates project to be mandatory from April 1, 2019. 2. Under Construction projects as on 31st March, 2019 will have an option to choose an old rate with ITC or new rates without ITC. 3. Upto 15% of commercial Spaces to be treated As Residential Properties for GST purpose. 4. Time Limit for Transition to new rates to be discussed with the States. 5. Reversal of Input tax Credit ( ITC) to be proportionate to the Area Space. 6. 80% of procurement of Material should be from Registered Dealers. 7. Affordable housing to be taxed at 1% without ITC.