new delhi the government is expected to lower goods and services tax gst on cement before next summers general elections while lowering the burden on home buyers opting for underconstruction apartments to 5 when the gst council meets in januarycement currently faces a 28 levy and a decision on the issue was postponed on saturday as the centre and the states did not want to take an annual hit of rs 13000 crore in case of underconstruction residential units a decision has been taken inprinciple although the modalities are yet to be finalizedsources said two options were being looked at with the first one being allowing the payment of 5 gst without offering the benefit of input tax credit to builders but to keep a check on cash transactions the builder will have to certify that 80 of the inputs such as cement steel paints and other building material have been purchased from entities that are registered for gst payment this will ensure that the claim can be verified by the authorities and help check leakage a government official saidthe other option is to allow 12 gst but with input tax credit which will reduce the actual incidence given that a set off is allowed for the value of the land this mode will ensure that the chain is not broken and those selling goods and services are part of the gst value chainthe change in the taxation regime for underconstruction residential real estate has been necessitated by market conditions as home buyers are preferring to opt for constructed units which are free from the gst burden on receipt of a completion certificate in this case the sale is treated as transfer of property that only attracts stamp duty and is outside the ambit of gstgiven the situation compounded by delays in delivery of flats builders are complaining that they are unable to raise resources from flat buyers at a time when fund flow from nbfcs is already chokeda final decision on the issue will be taken based on inputs from the states as well as gst authorities at the centre gst cut on cement is seen as another crucial move for the real estate sector which in the grip of a prolonged slowdownmahendra singhi president of cement manufacturers association and managing director and ceo dalmia cement bharat said a rationalised gst rate would definitely result into higher number of houses more km of roads and better infrastructure at the same cost we hope the government would be taking up lot of measures to speed up gdp to accelerate actions for becoming a 4 trillion economy by 2022