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The GST council meeting took a significant decision about the fate of realty firms in the GST regime. The council reportedly extended the GST deadline of opting for old GST slab.
The deadline has been extended to 20th May 2019 from the earlier deadline of 10th May. Firms working under realty sector can choose their GST payment slab.
Firms can either choose the old GST rate with an Input Tax Credit(ITC) or can shift to new GST rates. The latter option attracts a lower tax rate than the former.
Firms have the option to continue to the old GST rate slab of 12% GST with 8% ITC. They are also given the choice of a new GST slab. The new slab rate states GST of 5% for residential units and 1% for affordable housing units.
However, this scheme does not include the advantage of Input Tax Credit. The rates are applicable form 1st April 2019 in case the firm opts for this rate slab.
As per the directions of CBIC (Central Board of Indirect Tax and Customs), the companies have a one-time option to opt for their preferable GST slab.
Once the firm chooses a particular slab, they won’t be able to modify it later on for ongoing projects.
In case the companies do not exercise their choice for GST slab, they by default will be in the lower tax rate slab. Hence, they will not be able to avail the benefit of the tax credit on inputs.
Realty sector firms can communicate their choice to their respective jurisdictional officers by 20th May, 2019.
The real state sector is being provided with a flexible option to choose a tax slab of their will. This is another move of the GST council offering the flexibility of taxation in the sector.
GST deadline has been extended to 20th May, 2019, in order to benefit the firms. With the extended period more number of companies can register their choice.