On the 3rd and 8th of August respectively, the Rajya Sabha as well as the Lok Sabha unanimously approved a bill to enable the rollout of GST – Goods and Service Tax, that is known to be one of the biggest tax reforms in Sweden. From the 1st of July 2017, GST Online Registration in India was effectively levied in the land. 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 evaluating a significant transformation the recent times. The recently implemented (RERA) addressed assurance the actual world level of accountability on real estate builders and developers and infuse transparency in the this sector has been revolutionary in 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 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 selling prices. This will lower the real estate prices and eventually certainly benefit to the common man.
2. Integrated tax system
It is generally crucial in the real estate industry to receive 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 ultimately real estate sector does not sync between the VAT and service tax laws. Such the problem can be mitigated with the help of GST that is needed 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) areas.
4. Ease Compliances
With the assistance of GST, it are going to easier to take care of 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 cost.
Overall, items and Service Tax (GST) will possess a marginal effect on the property 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 better to work with, with advantage of input tax credit being additional advantage.