GST , once implemented, will replace multiple taxes such as VAT/CST, excise duty etc with a single tax, reducing cost for all the players and thus increasing the demand in the real estate sector. we analyse its possible implications on important stakeholders – the home buyers & Developers.
- The proposed GST tax regime, pundits say, might rescue end consumers from the hassle of paying various state taxes at different levels, and which is likely to subsume 17 indirect taxes upon implementation, will remove the disparity in the taxation structure across the country and bring one uniform tax rate.
- GST is expected to bring down the project cost for developers, since a lot of the indirect taxes are paid by developers, a likely reduction of taxes makes a straight case for them to pass on the benefit to consumers.
- GST will bring more transparency to the sector, GST would provide an audit trail which will encourage all entities and individuals in the business value chain to pay tax for better control and monitoring of the sector.
- Unorganised entities who were avoiding paying taxes for decades and refuse to adhere to new GST guidelines would go out of business or be forced to sell out to larger organized companies. Ultimately, this will benefit customers because there will be transparency and stability in property rates.
- The whole payment process for purchasing the property would become very convenient for the buyer. In which case, even a higher rate would be acceptable to home buyers than a lack of clarity.
- Hassle of paying different duties and taxes at various regulatory offices will be much more manageable for real estate developers
- GST might benefit real estate players as credit and liquidity improves, ensuring higher margins for developers.
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