REAL ESTATE AFTER GST
Our nation is witnessing a major change in tax reforms. May be the largest ever since Independence. The real estate scene is eagerly awaiting for the impact of the Goods and Service Tax (GST) to unfurl. Like all other sectors of industry, real estate scene will also be hugely impacted by the new reform.
At the starting point of any discussion, there is a consensus that GST will do away with the hugely complex taxation regime that existed in our nation. The new tax regime under GST will replace the multiple taxes collected by Union and State Governments and will become subsumed of all the indirect taxes, which includes Value-Added Tax (VAT) and service tax, central excise duty, commercial tax and octroi tax/charges among others.
While GST takes the country closer to a One Tax Regime, it is pertinent to note its highlights, before analysing it with reference to real estate.
Key factors of GST
The starting point is that GST will remove the cascading structure of taxation as it existed. In other words, there will no longer be tax on tax and the end user will not be subjected to the cumulative impact of it.
It has been pointed out that the GST will speed up taxation process through easy system of compliance by creating a uniform tax rate and structure. In the end this is expected to bring down additional tax burdens on consumers.
Even as experts work out the subtleties of the new regime, which will take some time to bring in clarity, the real estate should stay customer-oriented. As always, if the brand delivers its promises on time and in true spirits of the promise, the industry can overcome the initial glitches faced by the new tax regime.
In other words, the focus should be to focus on the basic industry commitments. This is the sure way to proceed and revive the industry.