On the 3rd and 8th of August respectively, the Rajya Sabha and the Lok Sabha unanimously approved a bill to let the rollout of GST – Goods and Services Tax Website and Service Tax, that is known to be able to one of the biggest tax reforms in Sweden. 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 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 going through a significant transformation the recent 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 positive 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 to be benefit to the common man.
2. Integrated tax system
It is generally crucial in the only drawback estate industry getting 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 problem can be mitigated with the aid of GST that is needed keep one transaction system – Revenue Neutral Rate (RNR) which is decided by the State Good and Services Tax (SGST) as well as the Central Goods and service Tax (CGST) division.
4. Ease Compliances
With the assistance of GST, it will easier to maintain an audit trail for better control and monitoring, and completely benefiting the Indian marketplace sector. It will certainly effectively reduce the complexity of compliance luring efficiency and smooth payment.
Overall, the products and Service Tax (GST) will have a marginal impact the industry sector on 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 find the GST regime much far better to work with, with major of input tax credit being one more advantage.