Goods and Services Tax (GST) completed its one year on July 1, 2018. Though the nation reacted in a warm manner to reforms, the real estate players have mixed feelings about its impact. For mutual benefit of the real estate industry and the buyers, they have demanded that the government tweak certain aspects.
Speaking on the occasion, Niranjan Hiranandani, president, National Real Estate Development Council(NAREDCO), said â€œWhile GST has resulted in implementing â€˜one nation, one market, one tax’ and done away with multiple state and local body-level taxes in addition to central levies, some positives that were to accrue from implementation of GST.
GST has brought more than 16 major taxes and levies into a single consolidated tax which has ended the practice of double taxation, adversely impacting real estate sector. GST rates were revised to 8 per cent for affordable housing and 12 per cent for other segments of housing. This has created an uneven levelplaying field. A uniform rate of 6 per cent for all categories of housing will benefit home buyers and the industry.
Speaking about the adverse effects of GST, zero GST on ready possession or homes with Occupancy Certificate (OC), while 12 per cent on under construction projects is causing the home buyers are not investing in under construction projects. â€œThis is impacting the sales of under construction projects as the new trend is that home buyers are opting for homes where they can save 12 per cent GST. This has created a scenario where home buyers are giving up the advantage of cost arbitrage offered by the developers in under construction homes,â€� he said.
As India is moving to more organized and fair tax system, completion of one year of GST is a milestone and aims to benefit all sectors including real estate.
Source: Mumbai Mirror.
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