While welcoming the lowering of Goods and Services Tax (GST) rate cut from 8 per cent to 1 per cent on affordable housing and other housing from 12 to 5 per cent, the real estate body Naredco however said that GST rate cut with no input tax credit will put pressure on developers’ margin and impact pricing of apartments.
“This cut in GST rates for under construction homes needs to be compounded with the other positives available to the home seeker,” said Niranjan Hiranandani, President, Naredco.
Removal of ITC on inputs such as cement and steel will obviously impact finances of various projects but viewed from a practical aspect it brings in clarity.
Recently, the GST council has lowered rates on real estate effective from April 1 without the input tax credit.
Fixing upper ceiling of cost at ₹ 45 lakh for affordable housing for whole country may be a deterrent and work against the objective of “Housing for all by 2022”, said the statement.
Addressing a concern, Naredco Vice Chairman, Parveen Jain said, “High cost of cement will only pinch them further and have an impact on housing price. This needs to be rectified or revised at the earliest.
Source : The Hindu Business Line