Grover Associates

5 Facts You Should Already Know About GST Impact on Real Estate

Real estate industry in India in the recent past has seen a phenomenal growth, not just in the Tier 1 cities, but even Tier 2 and Tier 3 cities and towns. GST (Goods and Services Tax) will surely have a significant impact on this sector. The real estate industry contributes about 7.8% to India’s GDP and is the second-largest employment generator after the IT industry.
Some facts to help you understand better:

# Immovable property transactions like transfer by way of sale of immovable property after completion, would continue to be outside the purview of GST and be liable only to applicable stamp duties.

# Under GST, developers would see lesser burden of tax on input items like cement, and steel, as tax credits would be available for set off at various stages.

# The home buyer in general could benefit from the introduction of GST if the rates are moderate.

# At present, developers pay various non-creditable taxes on supplies. GST may replace these multiple taxes with a single tax; credit on supplies may also be available, thus reducing costs for all players.

# States like Maharashtra and Andhra Pradesh have implemented a composite tax at a reduced rate on the entire value of the purchase price of the flat. If land is excluded from GST, such complexities and arbitrary distinctions will continue.

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