2nd April 2017
Good and Service tax is in its final Phase and things are ready for implementation.GST Bill has been passed in the two houses of Parliament. The indirect tax will be under execution on July 1. Nine set of rules have been approved and are ready for implementation. There will be meeting under supervision GST council for discussion on Individual Item on 18-19 May.GST will have basic four slabs-5%, 12%, 18% and 28% under the new indirect tax regime.
Real estate industry is concerned about the implementation of GST. Since there will be certain in Tax Slabs. This may raise the overall cost of properties if the sector comes under the expected 18% tax slab and stamp duty is not subsumed in the new tax structure.
According to the sources, GST will attract renting of commercial properties, land leasing and purchase of under-construction housing projects. 18% rate will be fixed.VAT and Service tax that customers pay at the time of buying a property has been subsumed. This will keep stamp duty out of its purview
Most of the real estate developers are anxious about a burden on the sector Since the industry is already under pressure after three years due to slow sales. After the implementation of GST, all tax norms will be subsumed. Stamp duty and other local body taxes will be unchanged.
GST rates for real estate should not be more than 12% said by the Real Estate industry expert. It should cover both CGST (central GST) and SGST (state GST) after providing credit for all the inputs. This will compromise GST growth.
Industry experts have appointments on this sought with the finance minister for the discussion on GST rate. A thought has come about subsuming of stamp duty which will have one common rate. Under this the end consumer paying stamp duty which is a state subject.
Cumulative tax of around 11-12% tax including both service tax and VAT, depending on the rules in each state is paid by home buyers.
Experts are also concerned about the stamp duty, which will differ from state to state, therefore should either be subsumed under GST or should be rationalized to about 2% from its current average rate of around 8%. GST will benefit the sector in the long run and developers may be able to save as there will be no excise duty on various raw materials.
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