On the 3rd and 8th of August respectively, the Rajya Sabha and also the Lok Sabha unanimously approved a bill to give the rollout of GST – Goods and Service Tax, that is known regarding one of the biggest tax reforms in India. From the 1st of July 2017, GST was effectively levied in the . This tax replaces multiple taxes levied by the central and state governments sorts 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 their 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 prospective.
Here is why the GST Registration in India will have a positive 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 selling prices. This will lower the property prices and eventually thought to be benefit to the common man.
2. Integrated tax system
It is generally crucial in serious drawback estate industry getting a uniform tax base. The builders and developers currently pay tax even on the purchase of their raw ingredients. GST addresses such issues by making all 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 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) and also the Central Goods and service Tax (CGST) sections.
4. Ease Compliances
With the help of GST, it will easier to maintain an audit trail for better control and monitoring, and completely benefiting the Indian property sector. It can do effectively lessen complexity of compliance drawing efficiency and smooth transaction.
Overall, the products and Service Tax (GST) will possess a marginal impact the real estate sector on the days arrive. There is remarkable improvements in buyer sentiments and change perceptions that buyers experienced against this sector. The Developers too will look for GST regime much much better to work with, with advantage of input tax credit being additional advantage.