The state government has given relief to the citizens who want to buy a house in the city via the Goods and Services Tax (GST) Council. For under construction houses, GST has been reduced from 12 per cent to 5 per cent and on affordable homes, it has been reduced to 1 per cent from the previous 8 per cent. New rates will commence from April 1. A residential property priced at ₹45 lakh or below will be defined as 'affordable'.
This has proved to be the biggest blow to builders. In addition, people found it difficult to buy a house due to its unaffordable rates therefore, the decision was taken by Union Finance Minister Arun Jaitley to cut prices of GST which proved to be a sigh of relief. The meeting of the GST Council was recently held in New Delhi where Finance Minister Arun Jaitley announced that the new rates will be effective from April 1, which will enable affordable prices for cities like Mumbai, Kolkata, Delhi, Chennai, Bangalore and Hyderabad. Further, a property of 60 square metres in metro cities and 90 square metres in tier 2 cities will be considered 'affordable'
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Jaitley said that the builders will not get Input Tax Credit (ITC) while cutting GST rates at home because many builders take ITC from customers but they do not offer its benefits to the consumers, therefore, considering the interest of the customers, the GST council has taken this step.