Budget 2015: GST to be implemented from 1 April 2016

“GST is expected to play transformative role for country’s economy.”

Finance Minister Arun Jaitley, in his Budget 2015 speech, has announced the implementation of Goods and Service Tax (GST) from April 1, 2016. With the introduction of the GST, a lessening in the number of various taxes executed is anticipated. These include service tax, excise duties and value added tax. It is also expected to simplify and streamline the indirect tax regime along with aiming at a reduced amount of paperwork and lower tax burden for the taxpayers.

GST & its Benefits

Goods and Services Tax (GST) is an Indirect tax reform in India and if implemented, it will be a milestone tax reform.

·         If comes into prevalence, GST can replace all of the current indirect taxes, thereby ensuing in the creation of a national market, by eliminating cascading taxes along with bringing in the proper alignment of taxation of imports and exports.

·         The primary intention of this tax reform would be to custom a common market by eradicating all fiscal barriers that are prevailing between different states.

·         It is eligible to bring in, an enhanced economy in the country and provide a lift to capital inflow from overseas, which will subsequently display a boom in the realty sector besides a demand in case of goods and services.

Impact on Real Estate

A probability of positive effects on the real estate industry is very much predicted with GST coming into play. While, an overall drop in the property prices is being anticipated. Fall in the cost of materials and transportation, which is a part of the construction business, is also in the line, which eventually will bring down the prices of housing projects, making them more affordable.

Apart from this, various other taxes, such as VAT, stamp duty, registration of fees, amongst few other, might see a reduction at a uniform level. It will stamp out the existing multiple layer of taxes and make it standardised, across the country.

Both the developers and real estate buyers, who are enforced to pay a variety of taxes, can also expect a respite. Inflow of international funds in the housing sector is expected to improve with GST being executed.

CommonFloor Verdict: With GST coming into force, real estate sector can definitely look for ‘aache din’ ahead.