No New Exemptions on GST for Long-Term Leases and Tourism in Real Estate Sector
The Group of Ministers (GoM) recently convened for its fourth meeting in an effort to boost the real estate sector. The meeting, which took place in Goa, was hosted by Chief Minister Pramod Sawant and was attended by several dignitaries including Bihar Deputy Chief Minister Samrat Choudhary and Maharashtra’s Women and Child Development Minister Aditi Tatkare. Also present were Gujarat Finance Minister Kanubhai Mohanlal Desai, Kerala Finance Minister K N Balagopal, Punjab Finance Minister Harpal Singh Cheema, Uttar Pradesh Finance Minister Suresh Kumar Khanna, and GST officials from the central government.
During the meeting, various issues regarding the real estate sector were discussed, particularly those related to Goods and Services Tax (GST) exemptions. It was decided that there would be no further exemptions granted on long-term leases of land by private entities, or for tourism-specific purposes.
Deliberations and Recommendations
The GoM members unanimously agreed that no additional exemptions were necessary in these areas, and that GST would continue to be levied at applicable rates. The discussions included a focus on the taxability of construction services provided by co-operative housing societies to their members in new or redevelopment projects.
While several viewpoints emerged during these discussions, it was deemed necessary to gather relevant data from the states before making any final decisions. As a result, the Committee of Officers will further investigate these matters and collect pertinent information from the states before the next GoM meeting, where a final decision will be reached.
Reevaluating Value Limit for Affordable Residences
During the meeting, the ministers also addressed the matter of reevaluating the value limit for defining an affordable residential apartment in metropolitan regions. It was agreed that input from the states of Karnataka, West Bengal, Tamil Nadu, Uttar Pradesh, Maharashtra, and Delhi was crucial in order to reach a consensus on this issue.
It is clear from the outcome of the GoM meeting that efforts are being made to strengthen the real estate sector, while ensuring the fair and appropriate implementation of GST regulations.
