GST and its influence on Real Estate

The Goods and Services Tax (GST), a Value Added Tax (VAT) is set to be implemented from 1st April, 2016. It is all set to integrate State economies and boost overall growth. It will create a single, unified Indian market to make the economy stronger. It will be a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level.

GST, India, reform, tax

When our Finance Minister Mr. Arun Jaitley, presented the bill in Lok Sabha, he called it as the ‘single most important tax reform after 1947’. A closer look of the Amendment Bill discloses that it not only seeks to empower the Centre and State with the concurrent taxing jurisdiction over ‘transaction of supply of goods or services or both’ but it also provides a prima facie broad framework as to what the Indian GST would be in terms of its coverage, its operating mechanism, implementation and dispute resolution.

How will this impact the Real Estate Sector?

Property transactions would warrant a review of the structure and rates of stamp duties and registration fees. Several levies would be phased out and thus decreasing the extra monies siphoned on ground. The states could be given a flexibility to levy stamp duties at a much reduced rate. Currently this sector is heavily taxed and thus the burden of taxes would come down with regards to the input tax on real estate activities like procurement of goods and services for undertakings like construction of apartment complexes.

Stamp duties are levied on multiple levels like development agreements, booking agreements and so on when purchasing a property. These too make a dent on a customer’s pocket. The cost of stamp duties are considerably high too. The property taxes are collected by the government.

Going forward, GST is an important regime which if given a holistic approach would bring in lots of transparency in the sector. Implementation of GST would be first step towards the vision of housing for all by 2022. You can read more about GST here.

Image courtesy: khabarindia

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About the Author: Krishanu

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GST and its influence on Real Estate

The Goods and Services Tax (GST), a Value Added Tax (VAT) is set to be implemented from 1st April, 2016. It is all set to integrate State economies and boost overall growth. It will create a single, unified Indian market to make the economy stronger. It will be a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level.

GST, India, reform, tax

When our Finance Minister Mr. Arun Jaitley, presented the bill in Lok Sabha, he called it as the ‘single most important tax reform after 1947’. A closer look of the Amendment Bill discloses that it not only seeks to empower the Centre and State with the concurrent taxing jurisdiction over ‘transaction of supply of goods or services or both’ but it also provides a prima facie broad framework as to what the Indian GST would be in terms of its coverage, its operating mechanism, implementation and dispute resolution.

How will this impact the Real Estate Sector?

Property transactions would warrant a review of the structure and rates of stamp duties and registration fees. Several levies would be phased out and thus decreasing the extra monies siphoned on ground. The states could be given a flexibility to levy stamp duties at a much reduced rate. Currently this sector is heavily taxed and thus the burden of taxes would come down with regards to the input tax on real estate activities like procurement of goods and services for undertakings like construction of apartment complexes.

Stamp duties are levied on multiple levels like development agreements, booking agreements and so on when purchasing a property. These too make a dent on a customer’s pocket. The cost of stamp duties are considerably high too. The property taxes are collected by the government.

Going forward, GST is an important regime which if given a holistic approach would bring in lots of transparency in the sector. Implementation of GST would be first step towards the vision of housing for all by 2022. You can read more about GST here.

Image courtesy: khabarindia

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About the Author: Krishanu

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Your email address will not be published. Required fields are marked *

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