Ever since the implementation of GST, home buyers across the country are left with many unanswered questions. People are still unsure whether this new law would increase the property rates or reduce it; or would it even have any effect at all.
In reality, GST is introduced to simplify multiple indirect taxes, tax compliances and reduce the scope for double or additional taxation. So, there is an obvious reason for home buyers to be happy, even if there’s only a little in the pricing.
GST is here to bring more transparency to real estate which has faced many trust issues in past. And we expect a positive impact!
The taxation earlier was too complicated for buyers. For example, buyers earlier had to pay taxes depending on the construction status of the property and the location. Buyers also had to pay VAT, service tax, stamp duty and registration charges on purchase of an under-construction property. However, if the purchase was for a completed property, the tax applicable were stamp duty and registration charge.
Furthermore, since VAT, stamp duty and registration charges were state taxes, each state specified its own figures. Service tax was a central levy and was charged on construction. So the calculation of taxes was very tedious in the earlier regime.
But now, GST charges all under-construction properties at 12 per cent of the property value. Not only that, but now the financial transactions will become more transparent
It is therefore, a welcoming step by NarendraModi government.