New Delhi, Feb 20 (IANS) The GST Council, which met briefly through video-conference on Wednesday extended the deadline for filing of 3B returns by two days, will meet again on Sunday to take up issues related to the real estate sector.
“The GST Council has extended the deadline of 3B returns by two days and will take up the real estate issues on Sunday,” Finance Minister Arun Jaitley announced after Wednesday’s meeting. GSTR-3B is a monthly summary return.
At the Sunday meeting, the council may also consider reducing the goods and services tax GST) on cement to 18 per cent from 28 per cent to give a boost to the realty sector.
The Finance Ministers of some states had expressed reservations about holding a discussion on issues like residential properties tax rates and lotteries through video conference and demanded deferment of the meeting.
The council may also take up a report by the group of minister (GoM), headed by Gujarat Deputy Chief Minister Nitin Patel, which has favoured 3 per cent tax, down from 8 per cent, on the affordable housing category. The GoM has submitted its report to the GST Council.
According to sources, the government is mulling various measures to revive the housing sector and the Council may accept the 3 per cent tax proposal. The property market is also looking for GST intervention to come out of the slump it is facing for the past few years.
The Sunday meeting may also change the definition of affordable housing to accommodate more poor people under the 3 per cent tax rate. At present, affordable houses are defined as the one with up to 50 square metres carpet area. It could be increased to 80 square metres to include more people in the category.
Both developers and prospective homebuyers are expected to gain from the move.
During the interaction, Punjab Finance Minister Manpreet Badal pointed out that land is a state subject and it cannot be included in the GST, while the representative for Bihar said it was in agreement with the report. He also wanted a lower rate of 1 per cent on small businesses, operating from 10 per cent carpet area in residential areas.
The panel, set up to look into GST-related issues of the real estate sector, is also said to have recommended a 5 per cent tax for under-construction residential properties, down from 12 per cent. Under-construction houses also attract 6 per cent stamp duty on registration.
But claiming input tax credit (ITC) would no longer be possible on such transactions.
While premium housing attracts 12 per cent GST, affordable housing 8 per cent on payments made for under-construction properties, where completion certificate had not been issued at the time of sale.
No GST is charged on the property bought after the issue of completion certificate.
The Council is also likely take a call on tax rate for lottery. A ministerial panel set up to review tax rate on lottery favoured a uniform tax, but the GST Council will take a call on whether it will be 18 per cent or 28 per cent.