The Goods and Service Tax (GST) came into force in 2017 and has had a significant influence on different businesses ever since its introduction. The purpose behind introducing this new tax regime was to replace several taxes and bring a uniform tax rate to make things easier. Additionally, the intent was to avoid the inefficiencies of the tax system in India.
Taxes Before GST Implementation
Under the indirect tax structure, there were multiple taxes levied on products and services. Different states followed different rules and regulations during the pre-GST era of taxation. Some of the taxes that GST has subsumed include Value Added Tax (VAT), Central Excise Duty, Central Sales Tax, Entertainment Tax, Purchase Tax, Service Tax and more.
After GST Implementation
Among the many taxes that homebuyers pay on real estate, GST is one of them. During the 33rd GST Council Meeting, GST rates on flat purchases for residential purposes were introduced. So, what is the GST rate for apartments? Let’s find out.
GST is charged at 1% without Input Tax Credit (ITC) on residential housing units that are a part of the affordable housing segment.
GST is charged at 5% without ITC on residential housing units that are not a part of the affordable housing segment.
Which Brings Us to the Question – What is Affordable Housing?
For a residential property to be covered under the affordable housing segment, it has to meet certain criteria. These are listed as below:
If the residential property is located in a non-metropolitan city or town, then the total carpet area must be 90 square meters and below.
In the case of residential properties located in metropolitan cities namely Bengaluru, The Delhi-National Capital Region, Chennai, Mumbai – Metropolitan Region, Hyderabad and Kolkata, the total carpet area of the building must be 60 meters and below.
In either of the above cases, the value of the property must be up to INR 45 lakhs to qualify as affordable housing.
Are you looking for a new apartment in Hyderabad? We at Aparna Constructions offer premium gated communities at all the prominent locations in Hyderabad. Our well-designed apartments are crafted for your comfort with modern amenities to live an opulent and relaxed lifestyle. To know more about our existing and upcoming projects, you can click here.
Get in touch with our sales team to get a tour of your dream house TODAY!
