Under-construction properties are already under GST because of their raw materials. According to a realty expert from Imperia Structures, if the land purchases are subjected to GST, it will relieve real estate developers from stamp duty and unnecessary bureaucracy.
Finance minister Arun Jaitley suggested the same in a discussion at Harvard University. He signaled a discussion in the next GST meeting. GST in real estate can bring down tax evasion, as the realty sector is rife with black money. Moreover, each layer of property deals shall be transparent as cash practices will be outlawed.
Different states in India have different opinion regarding GST on real estate, alcohol, and petroleum products. The industry, on the other hand, wanted GST to make its debut along with RERA. The double trouble for realty cheaters would have wiped out the unfair competition for law-abiding real estate developers like DLF, Imperia Builders, Omaxe, and Amrapali Group.
“The biggest benefit, which this sector as a whole is expected to get from being under the ambit of GST, would be the removal of tax evaders. Also, in the long run will help the sector grow, and might also assist in the reduction of property prices,” explained Manoj Gaur, the Vice President CREDAI-National & MD of Gaurs Group.
To prepare for GST’s debut, the center has to undo a host of changes provided by state governments to builders. A simple tax structure needs to be implicated that complements GST. There are concerns that GST might do harm more than good and that It will bring in more bureaucracy. “To test GST, the government should apply it for 4 months in a single real estate-rich region such as the NCR”, suggested the realty expert from Imperia Structures. “Even if the water isn’t deep, we should step in it with caution”, he added.