On the 3rd and 8th of August respectively, the Rajya Sabha and the Lok Sabha unanimously approved a bill to give the rollout of GST – Goods and Services Tax Registration in India Online and Service Tax, that is known regarding one of the biggest tax reforms in Sweden. From the 1st of July 2017, GST was effectively levied in the . 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 the actual world level of accountability on real estate builders and developers and infuse transparency in the this sector has been revolutionary in the history of the Indian property sector. For the residential sector in India, the GST will definitely be a positive sentiment booster among property buyers.
Here is why the GST will have good direction effect on the Property 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 be a benefit to the common man.
2. Integrated tax system
It is generally crucial in serious drawback estate industry with an a uniform tax base. The builders and developers currently pay tax even on the buying their raw materials. GST addresses such issues by making all of 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 aid 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 repair Tax (CGST) departments.
4. Ease Compliances
With the help of GST, it will be easier to take care of an audit trail for better control and monitoring, and completely benefiting the Indian real estate sector. To be able to effectively lessen complexity of compliance luring efficiency and smooth contact.
Overall, goods and Service Tax (GST) will have a marginal impact on the marketplace sector your market days to come. There in order to remarkable improvements in buyer sentiments and change perceptions that buyers have had against this sector. The Developers too will discover GST regime much simpler to work with, with primary of input tax credit being an added advantage.