GST Council Cut Tax On Under-Construction Homes Ahead Of Polls

New Delhi: The union govt  on Sunday announced a cut in the goods and services tax charged on sales of residential properties under construction, in a move certain to find favour with middle class voters ahead of elections later this year.

The Goods and Services Tax Council, comprising central and state finance ministers, announced that the new rate will be 5 per cent, down from the current 12 per cent, on all housing projects which were not in the affordable housing category, Finance Minister Arun Jaitley said.

The council also decided to lower the tax rate on affordable housing projects to 1 per cent from 8 per cent.

The council also altered the definition of affordable housing and said any house built on an area of 60 square metres or less in the metro cities of India will now be categorised as affordable housing.
For non-metro cities, the area would be 90 square metres and below. (Agencies)