Reduce GST Rate on Construction of On-going Residential projects from 1st April 2019 – As a builder, how to decide?
GST continues to test the businesses of their resilience of unlearning, updating and redoing. This time it has tested the builders. GST on construction service relating to residential and related commercial apartments has gone through a sea change. From 1 st April 2019, the effective GST rate is reduced to 1% from 8% for affordable category houses and to 5% from 12% for non-affordable category houses. However the reduced rate of output Tax has come with conditions that No ITC would be available to the Builders, 80% of the project-wise purchases (barring few items like diesel, electricity, grant of development rights, etc) by the builder would mandatorily be required to be made from registered vendors, Cement should be purchased only from registered vendors, etc. For a project that has commenced operations on or after 1 st April 2019, the new scheme is mandatory where construction services are provided along with transfer of land. For pure construction services, t...