On the 3rd and 8th of August respectively, the Rajya Sabha and the Lok Sabha unanimously approved a bill to allow the rollout of GST Registration Online in India – Goods 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 country. 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 having a significant transformation the recent times. The recently implemented (RERA) addressed assurance regarding 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 promising buyers.
Here is why the GST will have a constructive 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 outlays. This will lower the property 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 from the 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) as well as the Central Goods and service Tax (CGST) division.
4. Ease Compliances
With assistance of GST, it are usually easier retain an audit trail for better control and monitoring, and completely benefiting the Indian real estate sector. It’s going effectively reduce the complexity of compliance getting efficiency and smooth procedure.
Overall, goods and Service Tax (GST) will have a marginal impact on the marketplace sector a days arrive. There will be remarkable improvements in buyer sentiments and alter perceptions that buyers experienced against this sector. The Developers too will pick out the GST regime much far better to work with, with major of input tax credit being additional advantage.