Goods & Services Tax (GST), created a huge hullabaloo in the country. Yet, in the real estate community, both realty developers and buyers are somewhat cool about it. In fact, the application of GST on real estate is good for both the buyers and realtors. On that note, realty experts from Swadesh Builders, Aashima Builders, and Maa Vaishnav Builders bring you 5 things that you ought to know about GST on real estate, on the occasion of almost a year of its enforcement.
Real estate GST is 18%
Like on your restaurant order, there are two GST rates applicable on the flat or villa that you may be buying. There is the central government’s GST rate (CGST) and the state government’s GST levy (SGST). Both are 9% each in the case of realty, and add up to become 18%.
According to Swadesh Builders, It’s still difficult for analysts to figure out whether the levy is on the costlier side or not, as there’s lack of ample data.
Stamp duty and property tax included in GST
Nitin Agrawal, Bhopal says that home buyers won’t have to worry about the load of stamp duty and property tax in the Goods and Service Tax. They won’t have to pay them separately. Both of these prerequisites have been included and absorbed in the GST, making the whole process of buying a house smoother.
GST on raw materials
SGST and CGST have been applied on almost all the services and products, both raw and processed, in the country. Because of GST, the raw materials used to build real estate have become cheaper in some parts of the country. As a result, it will lower the price of real estate as well.
Tax issues will be easily solved
Thanks to GST, the tax structure has been streamlined. No more will you have to worry about a number of distinct taxes that have to be compensated before different deadlines. Taxpayers will only have to worry about GST now. Experts from Aashima Builders say, that there will be no issues of jurisdiction as both centre and state government levy their own fixed tax.
“Seeking redressal of a taxation issue would be far easier because in the new regime the same rule would apply to everyone,” says KPMG partner Priyajit Ghosh.
Resale properties are free from GST
Flats that have been registered as ready-to-move-in are free from GST.
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