Developers in a fix over charging GST for affordable homes

The government has announced concessional GST rates for the sale of affordable homes, but realtors are in a dilemma on charging lower rates, since there is no clear definition of such projects.

In its last meeting in January, the GST Council reduced the effective GST rates for affordable homes that are eligible for credit-linked savings scheme (CLSS), projects that received infrastructure status and houses built under LIG, MIG-1 and MIG-2 categories under the government’s Housing for All scheme, from 12 per cent to 8 per cent.

“The circular does not define affordable housing. Today we can charge 8% but later the department should not say it is not affordable housing,” said Anita Arjundas, managing director at Mahindra Lifespace Developers, the real estate arm of Mahindra group.

The government has said GST will be reduced for affordable housing projects that have been given infrastructure status, but “nobody gives such status,” she said.