1 min | Trends | 13 July 2017
Goods and Services Act (GST) is a national indirect tax that was implemented on the 1st of July 2017. Before GST, there was a multi-level taxation system – including VAT, Service Tax, excise duty and more - that affected not just homebuyers, but almost all businesses.
Now, with GST coming into force recently, it is expected to have a positive impact on Indian real estate. Here are a few of the many reasons why:
Simplification of tax structure:
1. GST has replaced 16 major taxes including:
2. Increased transparency:
Under the mandate, developers have to source inputs or raw materials from registered vendors so as to bring in more transparency.
3. Lower taxes on raw materials:
Bringing raw materials such as cement, iron rods, bricks and more, under the ambit of GST ensures a uniform tax is levied on all, which will be lower than the previous indirect taxes.
4. Easier processes:
Home buying was a complicated process that even the most seasoned home buyers were wary of. But that’s been greatly simplified with the enactment of GST.
5. Boost to foreign investment:
An all-inclusive and transparent tax figure available for the investors will encourage foreign investment, without them feeling the burden of multiple taxes. This will also improve overall quality standards in India as developers will try their best to match international quality standards.
6. Working with RERA:
GST and RERA together will bring in more transactional transparency into India’s real estate sector.
The GST has made home-buying a hassle-free process and the time to capitalise on its benefits is now!