• +91 8446500500
  • This email address is being protected from spambots. You need JavaScript enabled to view it.

Blog

Arun Developers, Pune

Arun Park, Opp. Aditya Birla Hospital, Chinchwad, Pune - 411033
Contact : +918446500500 / +91 7620300400

The Impact Of GST On Real Estate Sector

impact-of-GST-on-real-estate

Arun Jaitley, the Finance Minister of India and the Chairman of Goods and Service Tax (GST) re-proposed GST – the indirect taxation system in the year 2016 under The Constitution (One Hundred and First Amendment) Act 2016. The idea was to bring in all the different kinds of taxes into a single taxation system. This is reckoned to be one of the most important tax reforms post-independence. The GST Council consisting of representatives from the centre as well as the states, after being constituted, met on several occasions to discuss various issues including dual control, GST laws, exemptions, thresholds, rate structure, compensation cess etc. and reached consensus on the same.

After the GST bills were passed in the parliament on 29th March 2017, it was announced that implementation of GST will become effective from 1st July 2017 which will lay a clear road-map for India's taxation system. GST will help get rid of multiple taxes levied at Central, State, and local levels ensuring uniformity across the country. The most recent eight-hour long debate in the parliament rose several concerns such as inflation and many more impacts of GST on the Indian economy. The Finance Minister however, has assured no inflation whatsoever. Exports and direct tax like income tax, corporate tax, and capital gain tax will not be affected by GST either.

Before we get into the impact of GST on real estate sector, it's important to have a deeper understanding of the bill. The four main components of taxation under GST that was introduced in the Lok Sabha during the monsoon budget session of the Parliament are:

1) CGST (Central Goods and Service Tax) – Taxes collected under CGST will be the revenue for the central government. Present central taxes like central excise duty, additional excise duty, special excise duty, central sales tax, service tax etc. will fall under the purview of Central Goods And Service Tax.

2) SGST (State Goods and Service Tax) – A collection of SGST will be the revenue for State Government. After the introduction of SGST, all the state taxes like Value Added Tax, Entertainment Tax, Luxury Tax, Entry Tax etc. will be merged under SGST. For example, if goods are sold or services are provided within the State then SGST will be levied on such transactions.

3) IGST (Integrated Goods and Service Tax) – Revenue collected from IGST will be divided between Central Government and State Government as per the rates specified by the government. IGST will be charged on transfer of goods and services from one state to another. Import of goods and services will also be deemed to be covered under inter-state transactions and so IGST will be levied on such transactions. For example, if goods or services are transferred from Karnataka to Maharashtra, then the transaction will attract IGST.

4) UTGST (Union Territory Goods and Service Tax) – Under this bill, SGST kind of a tax cannot be levied in a Union territory without Legislature.

7 Myths About Investing In Real Estate
A Guide To Finding Your Dream Home
© 2018 Arun Developers. All Rights Reserved.