The GST Council meets on January 10; consider a 5% tax on apartments under construction

At its previous meeting on December 22, 2018, the board had streamlined the tax slab by 28% and reduced rates on 23 goods and services.

"The next meeting is scheduled for January 10," said a senior official at PTI.

This would be the 32nd meeting of the board, chaired by Finance Minister Arun Jaitley, and composed of state counterparts.

After briefing reporters after the recent council meeting, Jaitley said the next meeting would consider streamlining residential property tax rates and raising the threshold for MSMEs from the current Rs 20.

In addition, the board would consider a compositional scheme for smaller vendors, in addition to discussing the lifting of a calamity as well as GST rates on the lottery.

The GST Council will likely consider reducing the GST to 5 per cent on apartments and houses under construction, said one official.

At the present time, the Goods and Services Tax (GST) is levied at 12% on payments made for properties under construction or ready to move for which a certificate of completion has not been issued. not delivered at the time of sale.

However, the GST is not collected on purchasers of real estate for which a certificate of completion has been issued at the time of sale.

One official said that this 12% GST rate would ideally have been partially offset by the input taxes paid by the builders, so the actual impact of the GST on homebuyers under construction would have been from about 5 to 6%. However, builders do not pbad on the benefit of the input tax credit (ITC) to consumers.

"One of the proposals the board has is to reduce the GST rate to 5% for builders who buy 80% of the inputs from registered dealers," said one official.

The report of the group of ministers dealing with the concerns of MSMEs under the GST would also be examined.

Currently, companies with a turnover of less than 20 lakh are exempt from the GST. The Council could consider raising the threshold to 75 lakh for only MSMEs.

In addition, the board would consider a compositional scheme for small suppliers as it believed that the number of small service providers registered under the GST was not in line with expectations.

"A unanimous policy decision was made that a composition scheme be defined for small service providers, and the threshold and the dialing fee will be determined at the next meeting," Jaitley said on December 22.

Regarding the lottery GST, the state-run lottery currently attracts 12% of the GST, while the state-sanctioned lottery draws 28%.

Finally, one wonders whether the status quo should be maintained with respect to the GST on the lottery or whether it can be changed.

In addition, the board would discuss the perception of disaster relief under the GST.

The group of ministers led by Bihar deputy minister Sushil Modi (GoM) decided in October to seek the views of states on whether a national or national "disaster tax" should be taken from the GST.

The GST Council, the highest decision-making body in the new tax system, decided in September to create a seven-member government to study the possibility of ending rehabilitation after the Kerala disaster.