vijayawada the construction sector which has been crawling in amaravati is hopeful to gain momentum with the recent changes proposed in the goods service tax gst slabsthe union government recently proposed to tweak existing tax slabs reducing gst to 5 per cent from 12 per cent on under construction houses and flat one per cent on houses with less than 90 square meters carpet area the new tax slabs likely to be come into action from april 1if both slabs come into force without any riders the builders are hopeful of a 20 per cent growth in sales tummala vamshi krishna the general secretary of builders association of india amaravati chapter said that both the reforms are very positive for buildersthe sales volumes will definitely increase as the prices likely to come down by 7 per cent in cases of under construction housesthe proposed flat one per cent tax on the houses having carpet area less than 90 square meters will have a much more positive impact as the prices are expected to come down by 11 per cent he said more than 60 per cent of the houses will fall in this category and if the flat one per cent tax is implemented that will make a difference of rs 33 lakh to rs 4 lakh on the prices of the houseshowever the builders are still concerned over restoration of 18 per cent tax on payments to labour which will erode all the benefits accrued through reduction of the tax slabsvamshi krishna also added that the union government gave temporary exemption for gst on labour till march the law makes builders liable for gst on payments to labour we have been demanding to waive off this tax completely as 90 per cent of the labour in construction sector work belong to the unorganised sector and will have no gst registrationthough the labour cost has increased many folds in the last few years builders are not in a position to cut tax from their wages ultimately the burden will be transferred on to the home buyers tweaking gst slabs without waiving off gst on labour charges will not make any difference said y srikanth a builder from vijayawadagfxunion government proposed to reduce gst on under construction houses from 12 to 5builders in amaravati expect 20 growth in sales volumes once the tweaked tax slabs come in forceprices of houses in capital region likely to come down by rs 28 lakh to rs 4 lakh with the reduced gst slabs18 tax on labour charges may erode all the benefits of reduced slabsthough the tax on labour charges was incorporated in the law union government gave temporary exemption till marchlabour component contribute 40 per cent of total cost for the builders