On the 3rd and 8th of August respectively, the Rajya Sabha as well as the Lok Sabha unanimously approved a bill to encourage 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 world. 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 going through 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 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 clientele.
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 costs. This will lower the property prices and eventually thought about benefit to the common man.
2. Integrated tax system
It is generally crucial in serious drawback estate industry to build a uniform tax base. The builders and developers currently pay tax even on the purchasing their raw lumber and hardware. 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 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 repair Tax (CGST) divisions.
4. Ease Compliances
With assistance of GST, it will be easier maintain an audit trail for better control and monitoring, and completely benefiting the Indian marketplace sector. It will effectively lessen complexity of compliance luring efficiency and smooth procedure.
Overall, the products and Service Tax (GST Online Registration in India) will have a marginal cause problems for the real estate sector in the days to come. There often be remarkable improvements in buyer sentiments and alter perceptions that buyers experienced against this sector. The Developers too will look for the GST regime much much better to work with, with major of input tax credit being a great advantage.