GST Panel Recommends Raising Affordable Housing Price Limit to Rs 56 Lakh Nationwide

A government panel on GST for real estate is proposing to raise the affordable housing price limit from ₹45 lakh to ₹56 lakh per unit, making more homes eligible for the 1% GST rate without Input Tax Credit (ITC). This recommendation aims to widen the eligibility for affordable housing across all regions in India. The Group of Ministers (GoM) is preparing an interim report and awaiting a formal report from the Reserve Bank of India (RBI) before finalizing the new limit. Additionally, the GoM is considering whether GST should apply only to the construction cost, excluding the land component. Currently, land cost is calculated as two-thirds of the total project cost. If implemented, these changes could make housing more affordable by reducing the overall tax burden on residential projects.