The GST bill is sure to have some impact on the real estate industry. Here is a look at all the impacts:
- Impact on the developers:
At present the developers pay a number of independent taxes at different rates across a range of states. These taxes are levied on construction and raw material etc among other things. However, now the developers will have to pay a single tax at the time of construction, across all states. This will help to bring down the cost of construction substantially. The property prices will also be stabilized across India.
- Impact of the individual investors
Today an individual investor has to pay up VAT and service tax which vary across the various states. However, with the introduction of the GST bill, the investors will only have to pay a single tax. The stamp duty will however remain outside the gambit of this bill.
One thing you have to however note is that the common taxation rate may cause the property rates to go up significantly as some of the states have exempted the real estate sector from VAT.
- Impact on the commercial Property in India
In terms of taxation, the commercial property in India is considered as a separate entity and the GST bill is believed to make an extremely positive impact on the commercial real estate. The bill reduces taxation, as the developers will now be able to receive input credit, which is paid for construction against the GST charged on the lease rentals.
The GST bill will surely have a very positive impact on the industry. It will make it easy to do business, while promoting transparency in the real estate sector in India. The fact is that the bill will prove to be a big game changer in all respects.