One Year Old GST To Continue Boost Realty Sector

It’s been a year now when GST’s implementation was a debatable topic that whether it will smoothen the tax flow or not. 1 July 2017, it was a major initiative by the government to ease the tax system of the country by launching Goods & Services Tax. Under this, a regulated tax system was introduced of single tax pay only and is believed as the most ambitious tax reform yet.

However, the initial stage brought so many sets of challenges to understand the various industries and sectors. In the second year, it is expected that the government’s various proactive measures will achieve the desired objective of ‘One Nation One Tax’.

Realtors on the other side believe that it gave a boost to the sector but also was a toss on a toast. The major problem for this sector is the higher tax rate of 18 percent on the construction projects compared to the previous service tax of the 5 percent. However, the effective rate comes to 12 percent as a rebate of one third, given as land abatement. Leading realty players and industry consultants expressed their views on the anniversary of GST.

Gaurav Gupta, General Secretary, CREDAI – Ghaziabad & Director, SG Estates

GST has not only lent clarity in real estate but also brought in uniformity. Developers used to shell out a lot on direct and indirect taxes which at the end were passed on to the home buyers. Now with GST in place and Input Tax Credit being availed at each juncture, the burden has certainly eased a lot on the buyers. In a nation so vast and a sector so complex, GST is still relatively new but with time, GST will become mainstream.

Manoj Gaur, Vice President, CREDAI-National & MD, Gaurs Group

Post GST, simple and transparent tax started becoming applicable on the purchase of properties which turned out to be the biggest advantage for property buyers. Although, there has been not much difference on the prices post GST but it has definitely eased out the confusion which earlier prevailed for the homebuyers because of the multiple taxation systems. The next step would be to include stamp duty and registration under this umbrella as it will further help the cause of this sector.

Deepak Kapoor, President, CREDAI Western UP & Director, Gulshan Homz

With GST, business houses were free to procure from any part of the country without thinking of the state borders and the variable taxes in each of them. This has helped greatly in easing the transportation of construction material. Not only has it made easier for home buyers to understand the taxation system on their properties but has also marginally brought down prices with the option of Input Tax Credit.

Dhiraj Jain, Director, Mahagun Group

Implementation of GST has completed its first year and a great response can be already observed as the buyers’ queries are increasing day by day. Economy is shaping up well with a growth trajectory becoming visible for the real estate sector as well.

Vikas Bhasin, CMD, Saya Homes

GST has brought changes in the concept of tax as ‘One Nation One Tax’. This uniform tax structure in the real estate sector has enhanced the transparency and kept the tax evaders on check. With the anti-profiteering clause in the GST law, benefits received from the input tax credit are helpful for the buyers which in turn will create a fresh demand for real estate. Impact of GST in sync with RERA has transformed the Indian re&alty sector.

Dhruv Agrawala, CEO, Proptiger.com, Housing.com & Makaan.com

Elimination of various indirect taxes, lower transportation and logistics costs, benefit arising out of input tax credit and simplification of tax structure are the major highlights of GST which has allowed a much needed breather for the unorganised nature of the realty sector. A simple and clear method of purchasing property under the GST regime attracted the homebuyers towards the sector which in the long run also add onto the demand for property.