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GST brings down dodgy deals in property market
BENGALURU : The introduction of the Goods and
Services Tax (GST) in property transactions has led to
no significant variation in the overall tax outgo, it
has eliminated the tax-on-tax system and the number of
shady transactions has minimised considerably, bringing
in transparency and accountability into the sector.
“End-users have not received a consummate benefit
because of the inherent ineffectiveness of the
anti-profiteering provisions. They will only benefit if
the base property prices are reduced and developers pass
on the tax credits to their customers,” said Anuj Puri,
Chairman, Anarock Property Consultants.
While the tax-on-tax has been eliminated with the advent
of the GST, the overall outgo from homebuyers’ pockets
seems to have increased, considering that even after the
passing on of ITC (input tax credit), they may have to
pay 3-4 per cent more than in the earlier service tax
plus VAT regime. |
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“However, shady transactions are definitely reducing to
a considerable extent and the cause of bringing more
transparency and accountability into the sector is
served. Additionally, the input tax credit is a boon to
developers as it aids in bringing down the construction
cost,” explained Puri.
But there has not been any significant impact on the
ground; introduction of the GST was expected to reduce
property prices pan-India, .
“If the stamp duty and registration fees would be
subsumed under the GST regime, we will definitely see
the overall cost of property purchase come down,” said
Puri.
He further said that “GST definitely is reducing
developers’ construction cost by negating the morass of
double or triple taxation to a more moderate level
through input tax credit.”
“Post GST, the sector has witnessed a positive impact.
Now, this has distinguished fly-by-night operators from
trustworthy developers. Also customer confidence has
returned to well-known large developers,” said Anand
Narayanan, chief operating officer,, Puravankara Ltd.
In line with its ‘One Nation, One Market, One Tax’
philosophy, the GST reform should benefit the Indian
economy in the long run.
Puri said that “As the realty sector becomes more
streamlined on the back of GST and other landmark
reforms such as RERA, investor and consumer sentiments
will become more positive and further strengthen the
entire system in the future.
Source::: Business Line, Dated 15/06/2018.
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