Initially scheduled to be held on the 20th of Feb, 2019 via video conferencing, the 33rd GST Council Meeting was postponed to Sunday, the 24th of Feb, 2019 in Delhi. The Finance Minister Mr. Arun Jaitley was physically present at the meeting on the said day on the insistence of the finance ministers from various states who felt that some crucial decisions could be taken only by meeting in person and not via video conferencing.
This was the first meeting of the GST Council post Interim Budget 2019 that was held on February 1st. One of the most important agendas of the meeting was providing tax reliefs to buyers of under-construction buildings in India, in addition to having a unified tax rate on lotteries. The GST Council meetings have earlier yielded numerous GST rate rationalizations and updates in the tax slab structure of GST. Here is what this meeting resulted in:
Notable Decisions and Recommendations Made at the 33rd GST Council Meet:
- Reduction in GST rates in non-affordable housing sector: The GST Council agreed unanimously to slash the GST rates on under-construction buildings from 12% to 5%. It is being seen as a big boost to the sector and a much-needed relief for house buyers. However, the provision for ITC claim will no longer be available to the real-estate sector.
- Reduction in GST rates in affordable housing sector: The GST rates for affordable housing sector were already reduced to 8% from 12%, but the 33rd GST Council meeting brought it down to a mere 1%. The new rate will be applicable from 1st of April, 2019 post the release of a notification from the Council.
- Exemption of TDR/JDA, long term lease, and FSI: The GST Council further notified that the intermediate tax on the development rights shall be exempted for Transfer Development Rights (TDR), Joint Development Agreement (JDA), Lease (premium), and FSI. The exemption will be given on the residential properties that fall under the scope of GST. A meeting will take place solely to discuss these matters after which the move will be official.
- Unified GST rates for lotteries: Currently, state run lotteries not having private distributors or marketing agents have a GST rate of 12% on the face value of the lottery tickets, while lotteries operated by state authorized private distributors are taxed under a higher GST slab of 28%. The North-Eastern states of India had asked the GST Council to review the rates on lotteries and to have a unified taxation system at the 32nd Meeting of the GST Council. The Council felt that a few more discussions were required to come to a solid conclusion in this regard.
- No decision on GST rate on cement: The council, in its 33rd meeting, couldn’t come to a definitive decision on the rate rationalization of cement, which is currently taxed at 28%. The discussion has been deferred to the 34th GST Council Meeting to be held soon.