The goods and services tax (GST), cleared by the Rajya Sabha on Wednesday, is expected to benefit the real estate industry,A single consolidated tax, freeing the real estate sector from 16 major taxes and levies, has the real estate sector pumped.
Sector experts believe the proposed national goods and services tax (GST) would streamline the domestic supply chain and have a beneficial effect for home buyers.
Streamlining the sector’s domestic supply chain will lead to a consolidated and efficient warehousing infrastructure. This will give a needed push to the industrial and reail sectors.
With state and central government taxes being fused, double taxation would be avoided. The sector faces issues of multiple taxation, amounting to at least 25 per cent in indirect taxes.
At present, there are different types of taxes on almost all aspects of the real estate business, including land and construction, by state and central governments. Value added tax is levied by states and that on value of services by the Centre.
The heavy taxes that are being paid by developers may automatically go down by a considerable percentage. Construction costs may be reduced to some extent and this could be passed on to customers, triggering transactions in home buying. There may also be a positive impact on the commercial property segment.