The revised rate of GST on civil works contract was announced on February 24th, 2019 by the GST council. The council has reduced the GST rate on affordable housing to 1% from 8% and on non-affordable housing to 5% from 12%.
The decision is expected to provide a boost to the real estate sector, which has been reeling under the impact of sluggish sales and lack of investor sentiment.
The reduced GST rates on housing will help homebuyers save on their home purchases, while builders will also benefit from lower input costs. The lower GST rates will also encourage developers to launch new projects, which will provide a much-needed impetus to the construction sector.
The GST council has also made some other changes to the GST rates on civil works contracts. The council has reduced the GST rate on works contract for railway track construction to 5% from 12%. This move is expected to boost the infrastructure development of the railway sector.
Further, the GST rate on works contract for road construction has been reduced to 12% from 18%. The reduction in GST rates on road construction will provide a major relief to the highway construction sector, which has been facing multiple challenges in terms of project implementation and cost escalation.
In Conclusion, the revised rate of GST on civil works contract is expected to provide a significant boost to the infrastructure and real estate sectors. The reduction in GST rates will help homebuyers save on their home purchases, while builders and developers will benefit from lower input costs. Additionally, the reduction in GST rates on railway track construction and road construction will provide a much-needed boost to the infrastructure development of these sectors. Overall, the revised rate of GST is expected to have a positive impact on the economy and the construction industry.