Friday, 30 June 2017

GST Regime for Real Estate Sector

GST would bring a lot of transparency in the real estate sector and minimize unscrupulous transactions. Under the current tax laws, VAT and Service tax charged by different Contractors and excise duty, entry tax, octroi is paid on the procurements. 

GST law will increase the margin in the hands of contractor/developer by removing all the above-mentioned taxes. Now whether this benefit gets passed on to the end-consumer is unsure as pricing of real estate is driven by market forces than on costing principles.

Real estate sector enjoys a lot of benefits from facilities in SEZ and same are expected to be carried forward in GST.GST will help in filling the overwhelming gaps currently existing under the supply chain management process.
There will be many projects of developers which would require the transition from current tax laws onto GST. GST model law did not specify any provisions for the transition.

GST rate on Real Estate

Currently, the sale of land and buildings has been kept out of the ambit of GST but it is expected to be taxed within a period of a year. Construction of land and building will benefit from the rates declared for cement, bricks, and iron under GST.


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