The nation desperately needed a singular taxing format instead of a complex, amorphous system for its revival. The realty sector has had to go through an acid test in the times since GST was implemented, as there was an environment of qualm and perplexity looming across the new taxing scenario. However, according to experts, similar to any other industry that was swaying with the ambiguity at that time; the realty sector will in the distant future begin to reap profits and become productive. The article below helps us know the impact of GST on the real estate industry; in a way the scenario has shaped up presently.
18 % Tax on Real Estate
Revisions to the order from the authorities communicate that properties that are still in the process of construction will be liable for a tax rate of 18% inclusive of 9% SGST and 9% CGST. The government has also provided for the abatement of land value, which is corresponding to nearly a third of the accrued amount that a developer generally charges. As taxing levied on selling of land will put the sector in order and condense the aim of motivating a clear taxing system for the realty industry; the price of property, according to analysts, in fact is also dependent on the demand and supply chain.
Stamp duty and property tax to be brought within GST
In the current scenario, stamp duty and registration rates are not included within the scope of GST. These are the taxes imposed by the state, on the other hand, property tax comes from the municipality. In a large number of countries where GST is a regular tax, the scope of GST also comprises immovable property. Though the government has expressed its plans to ultimately contain all these taxes within GST, a lot remains to be seen.
Simplification of taxes
Post GST, the character of taxation has become much more simple. Alternatively, the property owner is able to pay one single tax since a lot of other taxes may be contained, yet as mentioned before, the time and the manner in which it is regulated and if the owner is required to pay tax just once or whether it is similar to the existent system; all of these still have to be clarified as per the announcements about update.
End of days for unregistered vendors
Now that GST has been implemented, for dealers who have not yet been registered, people would avoid getting into business deals with them. Now, the recipient is liable to pay tax. Therefore, if a consumer is keen on conducting business, the property he purchases should be only from a registered dealer so that he gets equivalent value of his liable tax instead of paying from his nose. This makes registration inevitable for vendors.
Positive universal impact, so far; haste can be a waste
As of now, the conclusion is that it is not easy to decipher the universal impact of GST on the realty sector; this will be clear with the passage of time. However, if things are streamlined and transparency and order is drilled into the taxing system; one can comfortably assume that customers will reap the profits and so will the vendors.