GST will free homebuyers and investors from the hassle of paying several state taxes at different levels
After many reforming initiations like “Housing for All” and RERA (Real Estate Regulatory Act), the next thing that Real Estate along with all other sector is looking forward to is the Goods and Services Tax (GST). GST will free homebuyers and investors from the hassle of paying several state taxes at different levels, therefore removing the double taxation impact. Simply put, GST replaces the multiple taxes levied by the central and state governments and will become subsumed of all the indirect taxes, including Central Excise Duty, Commercial Tax, Octroi Tax/charges, Value-Added Tax (VAT) and Service Tax.
A homebuyer henceforth will have to pay 12% GST to purchase a under-construction house. It is believed by many that the existing multiple indirect taxes on the real estate sector is higher and tax impact under GST would be neutral. Together with RERA, GST will go a long way in ensuring transparency in the realty sector and growing buyer confidence.
GST is also likely to boost foreign investment and benefit the NRI community for investment in real estate because of a seamless all-inclusive channel available. The simplification of taxation is probably the most positive aspect of GST and it will promise well for foreign investments.