Developers in Bangalore Reacting to GST ?

July 1 brings in the biggest taxation change in India in the form of GST. From that day leasing of land, rentals both residential and commercial and EMIs paid for under-construction houses will fall under the purview of GST. This bill has been long awaited by the industry. This is a major tax reform for our economy, which will transform India into a single market. This new tax structure will subsume existing taxes of service tax, central excise and VAT but yet there seems to be a rather mixed response to the roll out. Developers in Bangalore Reacting to GST 

The positive aspect

  • The bigger infrastructure giants felt it helps them expand into other states if there is a clear single tax as opposed to dealing with multiple local taxes. 
  • There would also be a positive impact on the commercial property segment, as commercial real estate which is already starving from funds could see some kind of a revival.
  • They strongly felt that the new taxation might also bring about a rationalization of property prices in favour of the consumer.

The Flip Side

  • On the flip side GST will increase the overall cost of under construction property. For buyers if the rate is higher than current applicable Service Tax rate of 15 per cent.
  • If the rate is relatively lower than 15 per cent. GST can result in price neutral or lower price for consumer.
  • A few others expressed scepticism since the stamp duty still remains with the state authorities. Which might result in additional charges such as labour cess and municipal taxes which might make the homes dearer to buyers.
  • The Model GST Law restricts credit on goods and services acquired for construction of immoveable property. This clause is interpretative which may lead to litigation and result in denial of credits in certain situations

However, the magnitude of impact of GST on the sector would hinge upon the final rate of GST. Decided by the government and more importantly on the actual implementation.

Views from Mr JC Sharma, Managing Director at Sobha

Views from Mr Irfan Razzak, Chairman Prestige Group

Niranjan Hiranandani, Co-founder & Managing Director, Hiranandani Group

3 Comments on “Developers in Bangalore Reacting to GST ?”

  1. Needed to put you the bit of observation to be able to give thanks as before for all the pretty basics you have contributed in this case. It is simply pretty generous with you to convey openly exactly what most of us would’ve supplied as an e book in making some profit on their own, especially considering that you could have tried it if you ever decided. These guidelines in addition served to become fantastic way to realize that most people have the identical passion just as mine to know lots more in terms of this issue. I think there are several more pleasurable opportunities ahead for people who read your website.

  2. I wanted to post you a very small word just to thank you so much over again for the remarkable principles you’ve provided on this page. It is so wonderfully open-handed with people like you to give openly all most of us would have made available for an e book to help make some profit for themselves, most notably now that you could possibly have tried it if you desired. These tips likewise acted like a good way to fully grasp that other individuals have the same desire really like my own to understand great deal more in terms of this problem. I believe there are some more fun moments ahead for individuals who looked over your site.

  3. I precisely desired to thank you so much once again. I am not sure what I might have accomplished without the entire aspects discussed by you about that industry. Entirely was the alarming matter in my view, but noticing a new professional form you handled the issue made me to cry over joy. I’m just happy for your help and even sincerely hope you recognize what a powerful job you have been getting into training the mediocre ones with the aid of your websites. I know that you have never encountered any of us.

Leave a Reply

Your email address will not be published. Required fields are marked *