1.5% GST Applicable to Service of Construction of Affordable Residential Apartment under REP: AAR

The Authority for Advance Rulings (AAR) clarified that a 1.5% GST rate is applicable for the construction of affordable residential apartments under the Real Estate Projects (REP) category. This ruling aligns with the government’s push to promote affordable housing through favorable tax policies. The AAR emphasized that projects meeting the criteria for affordable housing, including size and cost limits, qualify for the reduced GST rate. The decision provides clarity to builders and developers, ensuring compliance and proper tax planning. Stakeholders view this as a boost for the real estate sector, reducing costs for homebuyers in the affordable housing segment. Experts believe the ruling reinforces the government’s commitment to addressing housing needs while ensuring tax consistency. The rate structure intends to balance affordability for consumers and revenue collection for the government.