On the 3rd and 8th of August respectively, the Rajya Sabha along with 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 country. This tax replaces multiple taxes levied by the central and state governments kinds of 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 going through a significant transformation the recent times. The recently implemented (RERA) addressed assurance regarding 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 bidders.
Here is why the GST will have much better deals effect on the Marketplace 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 marketplace prices and eventually thought about 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 investment in their raw materials. GST addresses such issues by making all the taxes uniform.
3. Revenue Neutral Rate (RNR)
The method of tax operation in the real estate sector does not sync between the VAT and service tax laws. Such the 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) and the Central Goods and repair Tax (CGST) divisions.
4. Ease Compliances
With usually of GST Registration in India, it can easier retain an audit trail for better control and monitoring, and completely benefiting the Indian property sector. It can do effectively reduce the complexity of compliance luring efficiency and smooth cost.
Overall, items and Service Tax (GST) will possess a marginal cause problems for the industry sector on the days to come. There will be remarkable improvements in buyer sentiments and alter perceptions that buyers have had against this sector. The Developers too will discover GST regime much much better to work with, with advantage of input tax credit being a great advantage.