Great news for homebuyers looking to purchase in prime spots! The GST Council has simplified the tax treatment of Preferred Location Charges (PLC), making it a part of the composite supply with construction services. This clarification brings much-needed relief and lowers overall costs.

What is PLC and Why the Change?

PLCs are extra fees builders charge for apartments in desirable locations within a project, like those next to a swimming pool, sea-facing units, or corner flats. Earlier, PLCs attracted a higher GST rate of 18%, significantly increasing the cost for buyers.

The GST Council's recent decision aligns PLCs with the main construction service, eliminating differential tax rates and making it a single supply. This means the GST rate applicable to the construction service (5% for non-affordable housing, 1% for affordable housing) will now apply to PLCs as well.

Impact on Homebuyers

This clarification translates to a considerable cost reduction for homebuyers. With the removal of the 18% GST on PLCs, buyers can expect to save a significant amount, making preferred locations more accessible.

Industry Experts Welcome the Move

Experts like Harpreet Singh from Deloitte India have lauded the clarification, saying it resolves ambiguities around PLC taxation and provides much-needed relief to builders and buyers.

Key Points:

• GST on PLC is now the same as the main construction service (5% for non-affordable, 1% for affordable housing).

• The change eliminates differential tax rates, making it a single composite supply.

• Homebuyers save on costs, and preferred locations become more accessible.

• Industry experts welcome the move as it resolves ambiguities and brings clarity.

-source: thehindubusinessline.com