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EFFECT OF GST ON REAL ESTATE BUYERS AND THE INDUSTRY

GST or, Goods and Service Tax bill had been approved in the Lok Sabha in the month of March 2017 with 4 supplementary Legislations- The Central GST Bill, The Integrated GST Bill, The GST (Compensation to States) Bill, and The Union Territory GST Bill

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EFFECT OF GST ON REAL ESTATE BUYERS AND THE INDUSTRY

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  1. EFFECT OF GST ON REAL ESTATE BUYERS AND THE INDUSTRY By Sandeep | August 17, 2017 | 0 Comment

  2. GST or, Goods and Service Tax bill had been approved in the Lok Sabha in the month of March 2017 with 4 supplementary Legislations- The Central GST Bill, The Integrated GST Bill, The GST (Compensation to States) Bill, and The Union Territory GST Bill. Jaitley, the Finance Minister of India, made a very relevant statement, “Today, you have a tax on tax, you have cascading effect. When all of that is removed, goods will become slightly cheaper,” What’s the intent behind GST anyway? In simple words, it’s for the uniformity in the market. GST is supposed to boost GDP by about 2% and check tax sales evasion. What’s your take on GST- does it leave a positive impact on us? Well, to be honest, as tax payers, this is a huge profit for you! Instead of paying multiple taxes like VAT, octroi etc., you’re paying all of it in one, reducing the overall cost. However, as customers, you’re paying the amount which is not-so-positive. Impact of GST on the real estate industry This is one of the most complex industries and guess what, the GST is at the rate of 12% with ITC. According to reports, VAT for a few states like Karnataka has changed from 10-11 to 12%, all thanks to the new regime. Abhishek Anand, the Assistant Vice President of Equity Research says, “In the GST  regime, the transaction cost increases to 12%, with input credit available on both, services and material.

  3. Property transaction costs will increase by 6%, in case no input credit is passed on by developers. If developers pass on the input credit to buyers, the property price increase could be restricted to 1- 2%.” Nevertheless, the stamp duty shall continue to be applicable, irrespective of the condition of the property- under-construction or constructed, in the pre-GST and post-GST regime. Will GST help you, the buyers? Studies say that the impact of GST on property prices shall be difficult to gauge because this idea is so unclear to all. It’s like, learning from abstract to concrete and shall take not just time but, a lot of experimentation and experiences to understand and analyze the results of GST in India. Keep a few points in mind: Affordable homes may become furthermore cheaper under the GST regime because GST exemption can be exempted when it comes to affordable housing! When it comes to luxury houses, GST is limited to 12% only! With regard ti construction materials, GST shall vary from 18-28% per slab. What about GST on Ready- Made Properties? Here’s a fact for you- whether you opt for an under- construction property or, a ready to move- in one, the developer shall definitely hike the prices in a proportion such that, the gap is bridged. Guess what, the burden of paying taxes with regard to ready-to-move-in apartments is saved. How? Well,

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