Important points on GST to remember while spending on Real Estate
Our government has freshly made a great decision by changing the GST rates in the real estate market, which have been made effective from April 1, 2019. It is unquestionably an essential issue for the realtors who have taken GST registration and the buyers who have spent great sums in the real estate ventures. All around significantly, the developers were given a one-time choice to choose from the old and new GST rates on real estate ventures till a predefined time allotment. Presently, 2 different GST rates are appropriate on real estate ventures, one with ITC advantage and the other devoid of an Input tax credit.
Here are some very important things that you should not neglect while putting your resources into a Housing Project.
- What do we mean by a Residential Real Estate Project?
Private Real Estate Project, also called Residential Real Estate Project or RREP is primarily a Real Estate Project that has the total area of the housing condos up to 15% of the complete floor covering a zone of the whole structure in that venture.
- What are the criteria for another housing venture?
According to the new mandate,
- All works starting preceding April 1, 2019, yet not having gotten any reserving will be named as ‘new ventures’.
- These will be liable to the overhauled GST rates, without the advantage of Input Tax Credit.
- What is the definition of an on-going housing venture?
According to the GST guideline, an on-going venture means the one that fulfills the underneath criteria:
- Commencement certificate for that task has been allowed at the latest 31st March 2019. This Commencement certificate guarantees that the development procedure has begun. This implies unearthing for the site readiness for the task has begun and the establishment has been laid prior to 31st March 2019.
- Finish certificate has not been without a doubt, or the control of the first level in the venture has not yet been made at the very latest the 31st of March 2019.
- On the off chance that commencement certificate isn’t essential, it must be verified by specialists determined over that the development has started at the very latest the 31st March 2019.
- Booking of the Apartment has been done at the latest 31st March 2019.
- Who has the power to issue the commencement certificate for housing venture?
These are the approved gatherings who issue the commencement certificate for a housing venture:
- Registered architect,
- Chartered engineer,
- Licensed surveyor
- What are the criteria for issuing commencement certificate for housing venture?
Development of a task will be considered to have been begun at the latest 31st March 2019, if the earthwork for site readiness for the venture has been finished, and exhuming for the establishment has begun at the very latest the 31st March 2019.
- What amount of goods and services a promoter has to buy from registered providers?
According to the new law, a promoter or developer needs to buy in any event 80% of the complete estimation of input services, from providers having GST registration.
To determine this edge, the estimation of the accompanying services is to be rejected
- Give of improvement rights (TDR),
- Long haul rent of land,
- Floor space list (FSI)
- Efficient diesel, engine soul and gaseous petrol utilized in the development.