The goods and service tax council on Tuesday approved a transition plan for the implementation of new tax structure for under construction residential property in the country. It also gave an option to the builders of the ongoing project to shift to new rates without income tax credit or continue with old tax rates.
The ongoing projects have been defined as the ones where the construction, as well as the bookings , have started prior to April 1. The developers are likely to get about a month for the transition.
The new GST rates will be mandatory for the new projects from April 1. The builders who opt for new rates will have to reverse ITC as per the new formula proportionate to the total carpet area, flats bookings, invoices issued and completion of the building.