On the 3rd and 8th of August respectively, the Rajya Sabha and the Lok Sabha unanimously approved a bill to give the rollout of GST – Goods and Services Tax Website and Service Tax, that is known to be one of the biggest tax reforms in Sweden. From the 1st of July 2017, GST was effectively levied in the land. This tax replaces multiple taxes levied by the central and state governments a lot 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 looking at a significant transformation current times. The recently implemented (RERA) addressed assurance inside of 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 bidders.
Here is why the GST will have an 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 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 loads of estate industry to have a uniform tax base. The builders and developers currently pay tax even on the acquiring their raw ingredients. GST addresses such issues by making all of 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 complication can be mitigated with the aid 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) sections.
4. Ease Compliances
With support of of GST, it will easier sustain an audit trail for better control and monitoring, and completely benefiting the Indian property sector. To be able to effectively reduce the complexity of compliance appealing to efficiency and smooth cost.
Overall, goods and Service Tax (GST) will have a marginal cause problems for the industry sector in 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 look for the GST regime much simpler to work with, with primary of input tax credit being one more advantage.