GoM Rejects Further GST Exemption on Land Leases

GST on Long-Term Land Leases to Remain

In a crucial move, the Group of Ministers (GoM) on real estate has ruled out any further GST exemptions on long-term land leases by private entities. This decision directly impacts sectors such as tourism, where businesses were seeking specific exemptions. The meeting also touched upon other critical issues, including the taxability of construction services offered by housing societies and redefining affordable housing.

Panjim, North Goa Hosts the Fourth GoM Meeting

The 4th GoM meeting on real estate, held in Panjim, North Goa, was hosted by Goa Chief Minister Pramod Sawant. Key dignitaries, including Bihar Deputy Chief Minister Samrat Choudhary, Maharashtra Women and Child Development Minister Aditi Tatkare, and finance ministers from Gujarat, Kerala, Punjab, and Uttar Pradesh, attended the discussions. Central government GST officials were also present.

Private Land Lease Exemption Denied

One of the focal points of discussion was whether to extend GST exemptions for private long-term land leases, especially for sector-specific activities like tourism. The GoM unanimously agreed against further exemptions, stating that the applicable GST rates would continue.

Construction Services by Housing Societies in Question

Another major issue discussed was the taxability of construction services provided by cooperative housing societies in both new and redevelopment projects. Various perspectives were raised, and it was decided to gather more data from states before reaching a conclusion.

Affordable Housing: Value Limit Under Review

The GoM also examined the Rs 45 lakh threshold that defines affordable housing in metropolitan regions. To build a consensus on this issue, inputs from Karnataka, West Bengal, Tamil Nadu, Uttar Pradesh, Maharashtra, and Delhi are awaited. The discussion on determining land value for calculating the value of construction services for apartment sales was postponed for further analysis.

Awaiting Final Decisions

A Committee of Officers has been tasked with gathering relevant information from states to facilitate more informed decisions in the next GoM meeting. The GoM's decisions are set to shape the real estate sector's tax landscape, with implications for land leases, construction services, and affordable housing.

Disclaimer:

The information provided in this article is based on news sources. It is for general informational purposes only and does not constitute legal or financial advice. Readers are encouraged to consult with a qualified professional regarding specific tax or legal matters related to GST and real estate regulations.