In reaction to the GST, the council meets announcement on the transitional plan, Dr. Niranjan Hiranandani, National President, NAREDCO says that “The GST council addresses the transition issues on Input Tax credit for the ongoing projects with making it flexible for the developers to choose between the old GST v/s New GST schemes. This will allow the developers to opt between two GST schemes available i.e old GST rate with ITC or apply a reduced rate of GST without ITC for the under-construction projects in order to avoid operational hassles. Real Estate Developers who choose the new GST rates will have to proportionately reverse their input credit. The GST Council has also mentioned that real estate developers will need to purchase 80 percent of goods and services from GST-registered vendors even without input tax credit benefit. He further added that the developers can choose to have old and new GST rates for different buildings in the same project. The new rate, applicable wef. 01 April 2019 is 5 percent without tax credit or for Affordable Housing, 1 percent without the input tax credit. All new buildings and projects where work begins from April 1 will have to adhere to these new rates. The reduced rate of GST will surely enhance the customer’s confidence and develop a positive scenario to further garner momentum in sales.”
