By Accommodation Times News Services
The new GST will replace Service Tax and VAT. The exsisting tax payers and new tax payers will have to take
GST numbers. The new Tax reform will bring standardisation of cost of construction across the country since
VAT and other State Taxes will be standardized.
The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except on exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of Central Excise.
Mr. Parveen Jain, President, National Real Estate Development Council (NAREDCO), said, “The passing of the much awaited GST Bill in this Monsoon Session has spread happiness among the real estate community because of the benefits it will offer to the sector. The enactment of this law will single-handedly solve many of the challenges faced by the real estate sector and help in pulling the sluggish sector out of its long slumber. Heavy taxes that are being paid currently by the developers will automatically go down by a considerable percentage. Construction costs would be reduced to some extent and this benefit could be passed on to the customers, thereby triggering transactions in home buying. There would also be a positive impact on the commercial property segment, as commercial real estate which is already starving from funds could see some kind of a revival.”
Nishant Agarwal, Managing Director – Avighna India Ltd, There is no direct impact or benefit seen to the developer with GST coming in but VAT and Service Tax definitely constitute a significant part of construction cost and CENVAT availability will certainly result in savings which will get passed on to the buyer of the flats.