GST Council Likely To Meet Next Week To Discuss Cement Rate Cut
The GST Council is likely to meet on February 20 to discuss a proposal to slash tax on cement to 18 per cent from 28 per cent and also consider a recommendation of a Group of Ministers (GoM) on housing that advocates 5 per cent GST in under-construction properties and 3 per cent GST for affordable housing.
The GoM had earlier recommended 5 per cent GST without input tax credit (ITC) on under-construction housing and 3 per cent GST without ITC on affordable housing.
A rate cut in cement to 18 per cent which is long pending will lead to a loss of Rs. 13,000 crore annually to the government but with election drawing closer, the government is keen to ensure the GST cut benefits the end users in terms of lower prices and low cement prices could lead to low housing costs for the middle class.
The proposed GST cut in cement and the GoM report are on the agenda of the GST Council meeting on February 20, sources said.
The GoM on housing which will also meet once before the GST Council meeting takes place on February 20 could also change the definition of affordable housing to accommodate more poor people under 3 per cent tax rate. Currently, affordable houses are defined up to 50 square metres of carpet area which is likely to be increased to 80 square metres to include more people in the category.
Developers and prospective home buyers are expected to gain from this move.
The Cement Manufacturers Association had demanded a cut in GST to 18 per cent as it would boost infrastructure spending and create jobs while reducing the costs of buying a house.
Union minister Arun Jaitley had earlier said lowering the tax rate on cement was a priority. Cement is the only commodity used by the common man that is taxed at the highest slab.
Source :- Ndtv.com