Lok Sabha Question No. 1847 (UNSTARRED), answered on 2018-12-21
Subject: GST on Houses
Ministry: FINANCE
Asked by: P. C. MOHAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UNSTARRED QUESTION NO.1847

## TO BE ANSWERED ON FRIDAY THE 21 ST  DECEMBER, 2018 AGRAHAYANA 30, 1940 (SAKA)

## GST ON HOUSES

## 1847. SHRI P.C. MOHAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government proposes to reduce the Goods & Services Tax (GST) from the existing 12 percent on purchase of houses availing Credit Linked Subsidy Schemes  (CLSS)  under  the  Pradhan  Mantri  Awas  Yojana  (PMAY)  and  if  so,  the details thereof;
- (b) whether the Government is considering any proposal to increase the cap on the size  of  housing  units  to  avail  the  benefit  under  the  CLSS  and  if  so,  the  details thereof;
- (c)  whether the GST paid on the input taxes by the builders will be considered as input credit again without passing the tax liability to the buyers of the house;
- (d) if so, the details thereof and if not, the reasons therefore; and
- (e)  whether  the  Government  is  considering  any  request  from  those  who  do  not qualify for CLSS to reduce the GST from the existing 12 percent and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

- (a): There is no such proposal under consideration.
- (b):  The  carpet  area  of  houses  being  constructed  or  enhanced  under  Credit linked Subsidy Scheme for EWS/ LIG (CLSS for EWS/ LIG) should be 'upto 30 square metres' and 'upto 60 square metres' for EWS and LIG, respectively. The  beneficiary,  at  his/her  discretion,  can  build  a  house  of  larger  area  but interest subvention would be limited to first Rs. 6 lakh only of the housing loan availed.

Credit  Linked  Subsidy  Scheme  for  Middle  Income  Group  (CLSS  for  MIG) supports acquisition/ construction of houses (including repurchase) of 'upto 160  square  metres'  &  'upto  200  square metres'  carpet  area  respectively  as per income eligibility. No such proposal to increase the cap on the size of housing units under CLSS component of PMAY (U) Mission is under consideration in the Ministry. (c) & (d): Builders can avail the input tax credit of GST paid on inputs, input services and capital goods when they supply output construction service. Builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers of the flats, complexes etc. by way of reduction of prices/installments. Section 171 (1) of the CGST Act, 2017 mandates that reduction in tax rate on any goods or services or the benefit of input tax credit, shall be passed on to the recipient by way of commensurate reduction in prices. This provision shall be enforced in accordance with section 171 (2) and (3) of the CGST Act, 2017. (e): There is no such proposal under consideration. Note:  A  proposal  for  rate  change  of  tax  can  only  be  considered  by  the Government,  only  after  GST  council  makes  a  recommendation.  At  present there Is no such recommendation of the GST Council on (a) to (e) above.

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