GST(Goods and Service Tax) is applicable as per law from 1st July 2017. The new bill will be certainly reflect on Indian economy. GST bring lot of transparency to the real estate sector and minimize multiple transaction. Other taxes like central excise, service tax, VAT(value added tax) and local taxes will be replaced by flat tax structure that is GST to create one tax structure.
Good Impact :
GST may bring a lot of relief to the Real Estate sector. Real Estate sector is one of the pivotal sector of Indian economy. Also expected to become more transparent. GST will absorb many of the indirect taxes developers had to pay under the previous regime.
Impact on developers :
Developers were liable to pay custom duty, central excise duty, VAT, entry taxes etc. on construction material costs. They also have to pay 15 percent tax on services like labor, architect fees, approval charges, legal charges etc. Eventually this tax burden was transferred to the buyers.
Under the new regime, however the changes in construction costs are not as difficult. For example, cement will now be taxed at the rate of 28 percent under GST. This is higher than current average tax rate approximately 23-24 percent.
So overall, after introducing GST, it become easy for buyers to buy a property.
Would Like To Hear Your Comments