Now 8% GST on Affordable Housing – PMAY Urban (CLSS) for Homebuyers

GST Council, Central government has finally set 8% GST on Affordable Housing for the homes purchased under Credit Linked Subsidy Scheme (CLSS) component of Pradhan Mantri Awas Yojana – Urban. Subsequently, people will now have to pay 8% GST instead of 12% for under-construction homes in CLSS. Accordingly, new GST rates are going to be applicable from 25 January 2018.

However, this cut-off of 4 percent is applicable only to the people eligible for CLSS. Others still have have to pay 12% GST. This move of the GST council will boost the progress of the housing sector to achieve the Mission of “Housing For All by 2022”.

The effective rate of 8% GST (after deducting the value of land) is applicable for all the houses constructed or acquired under PMAY (CLSS).

New Rates of GST on Affordable Housing – PMAY U (CLSS)

Previously, the GST rate for Homebuyers on Affordable Housing was 18 percent (12% effective after deducting one-third of the cost of land). Now, the GST rate has been reduced to 12 percent (8% effective after deducting the cost of land). This rate is applicable to houses constructed or acquired under Credit Linked Subsidy Scheme for the following groups / categories of people:-

1. Economically Weaker Sections (EWS)
2. Lower Income Group (LIG)
3. Middle Income Group – First (MlG-1)
4. Middle Income Group – Second (MIG-2)

These GST rates are specified by the GST Council under the Pradhan Mantri Awas Yojana -Urban (PMAY-HFA U). Moreover, central govt. will provide interest subsidy under CLSS for acquiring or construction purposes to EWS / LIG / MIG-I / MIG-II category people.