The new change in the GST system for real estate sector is going to be an influential step. The Government of India has declared an imposition of 12 per cent GST on construction projects, which can be a game changer for the real estate sector. At least, National Real Estate Development Council (NAREDCO) is looking at this new tax rule as the stimulant for the industry. The key point is the new tax rule will cut off the surplus practice of double taxation. NAREDCO is looking forward to the positive impact of 12% GST on the real estate industry. The President of the Council Parveen Jain said, “The GST will be a game changer for the industry, including for real estate sector since it will subsume more than 16 major taxes and levies into a single consolidated tax.” Previously, the pressure of various taxes has increased the price of the properties. Consequently, the obvious result was huge dropping in the property selling was evident. The entire industry was at a loss. However, with recent development, the scenario will be different as in the words of NAREDCO Chairman Rajeev Talwar, “The heavily taxed real estate sector welcomes a single stable 12 per cent GST rate, inclusive of the value of land and with full input tax credits.”
This new regime in taxation will definitely bring a booming effect on the real estate sector. The 12 per cent GST on construction projects will combine numerous existing indirect taxes and tariffs. This onetime tax may match the previous tax money or even be lower than that, and it will definitely bring the price of the property lower than before. That mean, buyers will be able to think about affordable housing.
One of the flourishing real estate sectors in the country is in Delhi NCR. Various upcoming projects are in the pipeline. At this time, this new GST rule will rise up the sale of the property, as there will be significant drop in property prices. It is a great news for the sector as more buyers will be interested in investing in the property as their dream of affordable housing in Delhi NCR will come true.
This positive impact on the real estate sector will be shown on the country’s GDP because real estate industry is responsible for about five per cent of GDP. Hopefully, this new step will have a constructive effect in future both for investors and for the economy.