The Goods and Services Tax Council on Tuesday has allowed the Real estate developers to choose between the old and the new GST regimes, for the projects that will remain under construction as on March 31.
The council has also removed the fear among these developers that they might lose accumulated input-tax credit for the under construction projects if they choose the new rate structure.
The Council approved a formula to determine the extent to which tax credit can be claimed on purchases for constructions. This formula is based on four factors given below:
Extent of completion of the project;
extent of booking of apartments by buyers in the project;
extent of invoicing of purchases for that project; and
the proportion of residential space in the project.
If the income-tax credit derived from the formula exceeds what is claimed till March 31, the developer would be eligible to claim the difference. If the derived value is less, the developer would need to reverse a part of the credit.
This is a developer-centric decision, which will help the real estate market. Realtors are likely to retain the old rate structure for projects nearing completion, while opt the new one for projects just begun.
A single developer building multiple projects has been allowed to avail different rate structures for different projects
Agenda for the 34th meeting of the Goods and Services Tax (GST) Council, scheduled on Tuesday is as under:
To discuss and finalise the rules, under which the new rate structure on under-construction houses will be imp¬lemented to bring transparency between home buyers and builders;
Approval to setting up of regional benches of the GST Appellate Tribunal to help faster resolution of “place of supply”-related disputes.
Council will clarify the extent to which a developer can avail the input-tax credit (ITC) available in the system against inputs purchased, in addition to the mandatory requirement of 80 per cent purchases from registered dealers.
Builders would be able to determine the price of unsold inventory of houses under construction, since they would be able to allocate the ITC across them unit-wise.
Various doubts raised by real estate developers about the reduced tax rates without ITC eligibility would be resolved to a good extent.
On March 18, 2019 (Monday), the Indian rupee closed at 68.53 (seven-month high ) against US dollar on account of the following factors:
– increased foreign inflows into equities and debt;
– investment by Foreign portfolio investors (FPIs) ;
– dollar’s weakness against its key rivals overseas; and
– some comfort on the political results of the upcoming elections
The Indian Steel Association (ISA) of top local makers of the alloy has urged New Delhi to take immediate steps to ban imports from Iran.
Increasing imports after the imposition of US sanctions on Tehran and/ via the UAE at acquisitive prices have added to the worries of Indian steel companies, should be banned since this trade can attract retaliatory measures by the US against India
There is a sudden increase in the exports from the UAE including flat steel products. This established the linkage of transhipment of Iran origin steel via the UAE.