Positive Impact on Real Estate in India After Implementation of GST

On the 3rd and 8th of August respectively, the Rajya Sabha and the Lok Sabha unanimously approved a bill to encourage the rollout of GST – Goods and Service Tax, that is known to be one of the biggest tax reforms in India. From the 1st of July 2017, GST was effectively levied in the locale. This tax replaces multiple taxes levied by the central and state governments and all 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 looking at a significant transformation current 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 on the history of the Indian property sector. For the residential sector in India, the GST will definitely be a positive sentiment booster among property prospective.

Here is why the GST will have a constructive 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 industry prices and eventually be a benefit to the common man.

2. Integrated tax system

It is generally crucial in the real estate industry with an a uniform tax base. The builders and developers currently pay tax even on the acquiring their raw ingredients. GST addresses such issues by making all of the taxes uniform.

3. Revenue Neutral Rate (RNR)

The method of tax operation from the real estate sector does not sync between the VAT and service tax laws. Such a problem can be mitigated with the assistance of GST that would help keep one transaction system – Revenue Neutral Rate (RNR) which is decided by the State Good and Services Tax (SGST) along with the Central Goods and Services Tax Website and service Tax (CGST) division.

4. Ease Compliances

With support of of GST, it will be easier retain 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 getting efficiency and smooth transaction.

Overall, the products and Service Tax (GST) will have a marginal effect on the real estate sector in days to come. There often be remarkable improvements in buyer sentiments and alter perceptions that buyers experienced against this sector. The Developers too will discover GST regime much much better to work with, with the benefit of input tax credit being an added advantage.