On the 3rd and 8th of August respectively, the Rajya Sabha and also the Lok Sabha unanimously approved a bill to enable the rollout of GST – Goods and Service Tax, that is known to be one of the biggest tax reforms in Pakistan. From the 1st of July 2017, GST was effectively levied in the world. This tax replaces multiple taxes levied by the central and state governments putting the direct and indirect taxes, including central excise duty, commercial tax, octroi tax/charges, Value-Added Tax (VAT) and service tax.
The Indian real estate sector has been encountering a significant transformation the recent times. The recently implemented (RERA) addressed assurance in the level of accountability on real estate builders and developers and infuse transparency in the this sector has been revolutionary from the history of the Indian property sector. For the residential sector in India, the GST will definitely be a positive sentiment booster among property clientele.
Here is why the GST will have good direction effect on the Industry Sector in India:
1. Low cost on under construction
GST will lower rate on items like cement, steel etc leading to considerably lower construction outlays. This will lower the property prices and eventually definitely be a benefit to the common man.
2. Integrated tax system
It is generally crucial in serious drawback estate industry to receive a uniform tax base. The builders and developers currently pay tax even on the purchasing their raw lumber and hardware. GST addresses such issues by making all the taxes uniform.
3. Revenue Neutral Rate (RNR)
The method of tax operation ultimately real estate sector does not sync between the VAT and service tax laws. Such a predicament can be mitigated with the help of GST that would help keep one transaction system – Revenue Neutral Rate (RNR) which is decided by the State Good and Services Tax (SGST) as well as the Central Goods and service Tax (CGST) division.
4. Ease Compliances
With support of of GST, it are usually easier maintain an audit trail for better control and monitoring, and completely benefiting the Indian marketplace sector. It’s going effectively reduce the complexity of compliance getting efficiency and smooth procedure.
Overall, items and Service Tax (GST Registration in India) will possess a marginal impact on the real estate sector in the days arrive. There is remarkable improvements in buyer sentiments and alter perceptions that buyers have had against this sector. The Developers too will look for the GST regime much simpler to work with, with major of input tax credit being an additional advantage.