GST in Real Estate
A lot of uncertainty has gripped the real estate sector as India moves towards an indirect tax regime. GST rolls out in the Indian economy on 1st july and has posed one relevant question in the mind of the home & property buyers:
Will property prices go up due to GST?
The GST rate for real estate sector has been fixed at 18% which appears enormous as compared to service tax which was charged effectively at 4.6%. Several leading experts are of the opinion that the actual tax incidence under GST shall be equal to or lower than the existing multiple tax regime.
There is good news for the developers as well. The GST rate for works contract shall be offset by the input credit available. Double taxation shall be eliminated under the unified tax structure along with the cascading effect which ultimately led to inflating prices of properties.
So in effect how GST impacts the economy yet remains to be seen but it is definitely going to revolutionize the real estate sector.
CAclubindia
