The Positive Impact of GST on Indian Real Estate

GST (Goods and Services Tax) was implemented on 1st July 2017. It brought many taxes together under a single name, It has shown many positive impacts on buyers as well as developers. These 5 years it has brought quite a drastic change in the Indian real estate market. We are going to tell you about some significant positive impacts it has on the Indian real estate market.

 

Replacement of 16 Major Taxes: With the introduction of GST, almost 16 taxes were replaced by it. On the central level, taxes like central excise duty, additional excise duties, service tax, central sales tax, and some other taxes whereas on the state level, taxes like state VAT, sales tax, luxury tax, advertisement tax, purchase tax, state sales, and some other taxes have been replaced by the GST. Due to this, Many complications and ways of tax evasion are gone. This has made taxation more convenient and secure leaving a positive impact on the buyers as well as builders. A huge part of Indian real estate is unorganized and the introduction of GST has increased the convenience in this sector.

 

Increased Transparency: Due to the replacement of so many indirect taxes and the usage of online methods, transparency has increased a lot for customers. This has made property investment safer and easier due to no hidden indirect taxes and other related issues, and the availability of all the information has reduced many former complications.

 

Lower Taxes on Raw Materials: Due to GST, fixed interest rates are charged on the raw materials by the center and state. This also prevents the cascading effect of taxes due to which the taxes are now comparatively lower, especially for long-term properties’ extensive construction works.

 

Easier Processes: One of the biggest advantages of GST is the simplicity of the process. The entire process is made online and is very convenient. Now, contractors don’t have to register for different taxes because GST is taking care of so many taxes that existed earlier. This simplicity has brought a positive impact on the builders making the property investment more convenient.

 

Increase in Foreign Investment: The GST is having a  positive impact on foreign investment due to the reduction of multiple taxes into GST. The reduction in logistics costs and regulatory compliances have made exports easier inviting more foreign investment. It is really effective in the long run.

 

Working with RERA: GST has reduced the construction cost and has increased the margin for builders, The ease of access provided by it has made it very compliant with the provisions of RERA which ensures customer safety and transparency of the information. The introduction of GST has made the implementation of RERA a lot easier. This is encouraging for the builders and the buyers.

 

GST indeed has some of its complications but in a long run, it is effective and has started showing a positive impact on the Indian real estate market. Any property or under-construction property will face the positive impacts of the GST in foreseeable future because of the convenience it offers.