Tax boost for real estate

But selective exemptions distort the GST regime

The Goods and Services Tax (GST) Council has provided a big relief to the real estate industry by cutting the rate on under-construction housing to 5 per cent from an effective 12 per cent, providing relief to homebuyers ahead of the Lok Sabha elections in May. The Council has given an even deeper cut, of 700 basis points, for the affordable housing segment by reducing the effective GST rate to just 1 per cent from 8 per cent. The rate cuts should lead to real estate prices coming down by as much as 6 per cent, according to industry calculations.