To
say the least, the Indian real estate sector has been going through significant
transform in the recent times. The recently implemented Real Estate and
Regulation Act (RERA) has already started addressing the issue of
non-transparency and affixes a level of accountability on real estate builders
and brokers which is unprecedented in the history
of the Indian property sector.
For the residential real
estate sector, the implementation of GST will definitely be a positive
sentiment booster among property buyers.
Benefit to Property Buyers:
A
simple and transparent tax applied on the purchase price is the biggest take-
away for property buyers. Under the GST regime, all under-construction
properties will be charged at 12% (excluding stamp duty and registration charges).
Benefit to Developers:
In the previous tax regime, real estate developers also grappled with the challenge of multiple taxation. On various construction materials they purchased, builder paid customs duty, central sales tax, excise duty, entry tax, etc., thus creating various instances of multiple taxation. The cumulative burden eventually got passed on to the buyer.
GST will eliminate all the other taxes, and the benefit of being able to claim input tax credit can also improve developers’ profit margins.
Courtesy : realtyfact.com
