The GST rates have been announced and government has fixed 12 per cent for work contract while cement has been put in 28 per cent tax slab from earlier 23-24 per cent in the current tax regime.
Full availability of input tax credit and elimination of multiple indirect taxes will step-up a positive sentiment in the real estate sector. Industry experts said benefits of input tax credit on raw materials will negate the impact of putting cement in the highest tax slab of 28 per cent. Earlier the Credit in Input Tax Credit was not allowed to the Sector which was taxed in terms of Service Tax with abatement.
The full availability of input credit as compared to current regime is expected to be beneficial for reducing project costs under the GST system for the Real Estate Builders and Developers. Under GST regime entire input credit is allowed to the real estate sector. This should also incentivise the people to come within the tax net and rationalise the Market.
However a few things are not yet clear and the same would surely become more clear in the days to come with more clarity being issued by the Government.
The REAL ESTATE sector is already witnessing the reforms in terms of the introduction of RERA. Furter GST would be very helpful for the organised Sector and also bring in more transparency into the Sector. With more transperency will come more trust and should be very helpful for the Industry in the near future.
The Real Estate Sector is looking positively towards the GST. Hope in Years to come the Stamp duty would also come within the GST and make things more clear and affordable.