The GST Council, in its 34th meeting held on 19 March 2019 in New Delhi, took key decisions on the GST rate structure and transition mechanism for the real estate sector, focusing on reducing tax burden and providing clarity to developers and homebuyers. The Council discussed the operational details for implementing its earlier recommendation of lower effective GST rates of 1 percent on affordable housing and 5 percent on other residential housing, both without input tax credit (ITC). To address ongoing projects, promoters were given a one-time option to either continue with the existing GST rates of 8 percent or 12 percent with ITC or shift to the new concessional rates, subject to prescribed timelines. For new projects and projects opting into the new regime, the reduced rates were made applicable with clear conditions, including the non-availability of ITC and a requirement that at least 80 percent of inputs and input services be procured from registered suppliers, failing which tax would be payable under the reverse charge mechanism. The Council also approved a detailed transition formula to determine eligible ITC for ongoing projects shifting to the new rates, ensuring proportionate credit based on construction progress and bookings. Further, the treatment of transfer of development rights (TDR), floor space index (FSI), and long-term lease of land was rationalised, with tax liability shifted to the builder under reverse charge and deferred to the completion stage to ease cash flow pressures. Amendments to ITC rules were also approved to provide greater clarity, especially for mixed projects with commercial components. These decisions were aimed at boosting the real estate sector, improving affordability, and ensuring smoother implementation through subsequent notifications and circulars.