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03 April, 2017

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GST to be applicable on land leasing and renting: - property sale excluded

With the deadline for rolling out of goods and services tax (GST) just three months away ,the central government has formulated the legislation. While real estate has not been included in its entirety under GST's purview, goverment expected to consider the same within a year.

While the preparation of GST roll out, government had passed four crucial bills for implementing on GST, integrated GST bill (IGST bill), central GST bill (CGST bill), union territory GST bill (UTGST bill) and the GST ( compensation of the states ) Bill. Further 16 cesses has also abolished with central services tax and excise duty.
A huge compliment to the central's effortment for successing the implementationn of the new tax regime, indusrty experts  affirm who made the possible and this will bring an sarcastic transformation in the economy. Meanwhile, the real estate's stakeholders had manifested their concerns as the sector had not yet been included in the purview of GST, but government have clarified it soon with the statement that it is included in leasing and renting.
Animadversion on the statement,  Amit Wadhwani, Director of Sai Estate Consultants, explain that the impact of GST on the sector will be defined by the final tax and abatement for the land value in the total agreement value of resident project. Uttermost experts presume the GST rate to be 18 percent and the value of land it not be abounding 25  percent of the total value of residential units.
For all that, indusry experts who maintain that even with the sale of properties excluded from GST, the historic emend still clench on the great apeal for the real estate sector. According to Wadhwani, the possibility of lower construction costs on account of input credit allowance could lower property prices if developers are ready to voluntary to pass on the benefits the end users. In turn, mean a saving of upto 20 percent.


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