They say ‘Change is the only constant’ but in order to succeed, change is not only constant but it is also inevitable. After many reforming initiations like “Housing for all” and RERA, the next thing that Real Estate along with all other sector is looking forward to is the Goods and Services Tax. GST is set to get implemented on 1st July 2017. There are various goods and services which will have different rates prescribed by GST, which may impact their cost. A homebuyer henceforth will have to pay 12% GST to purchase a under construction house. If we look at the current scenario, real estate sector was heavily taxed, therefore 12% single tax structure is definitely a welcome move. We believe that existing multiple indirect taxes on the sector is higher and tax impact under GST would be neutral. While the impact of GST on various sectors and goods is now known, industry experts are still divided over how GST will impact real estate going ahead as clarity on the tax slabs for services is still awaited.
Together with RERA, GST will go a long way in ensuring transparency in the realty sector and growing buyer confidence. The existing channels include issues of multiple taxation, amounting to indirect taxes and no uniformity. GST coupled with Real Estate Regulatory Act that has come into effect on May 1, 2017, would ensure efficiency in the realty sector. GST will free homebuyers and investors from the hassle of paying several state taxes at different levels, therefore removing the double taxation impact. Therefore 12% tax rate under GST regime looks favorable to the industry.
via How GST will impact real estate sector going forward – The Financial Express
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