A GST rate of 1% without Input Tax Credit (ITC) would be charged on the under – construction affordable housing projects. This new rate shall be applicable to:
All houses that come under the purview of affordable housing definition as declared by the GST council in its 33rd meeting. The Council adopted a twin approach to define affordable housing. Accordingly, the term ‘Affordable Housing’ is defined on the basis of: (i) Carpet Area and (ii) Cost of Under – Construction Property. As per the carpet area approach, a residential house or flat would be taken as an affordable house if it has (a) a carpet area of 90 sqm in non-metropolitan cities/towns and (b) 60 sqm in metropolitan cities. Alternatively, a residential house/flat would come under affordable housing if its value is up to Rs 45 lakhs. This is both for metropolitan and non – metropolitan cities.