India 04 August 2016:
Reaction of Real Estate developers on GST Bill, that has recently passed from Upper House (Rajya Sabha).
Posted by: Clara Fernandes at 8/04/2016 04:24:00 am
India 04 August 2016:
Mr. Deepak Kapoor President CREDAI Western U.P
Mr. Gaurav Gupta,General Secretary, CREDAI Raj Nagar Extension
Mr. Prashant Tiwari, Chairman_Prateek Group
Mr. Sushant Muttreja, Chairman, Cosmic Group
Mr. Zafar Akbar, Chairperson, Exalter Group
Mr. Deepak Kapoor, President CREDAI Western U.P. said, “The implementation of GST Bill will aid in broadening the coverage of tax base, infusing transparency and also removing the present unhealthy competition among different states. Once GST is implemented, the multiplicity of taxes which leads to ambiguity would be eliminated. We are optimistic that new GST rates if kept rational would bring down the property prices due to lower input costs and as a result demand is expected to grow in near future. However, exclusion of Stamp Duty charges from the GST is a setback as home buyers will have to pay stamp duty too other than GST. Still, the benefit may go to home buyers if lower rate of GST is levied. Also it is very important that GST be implemented at the same rate in all the states to bring in uniformity.”
Mr. Gaurav Gupta, General Secretary CREDAI Raj Nagar Extension says, “Once GST Bill is implemented, it would boost transparency and uniformity in real estate sector. Home buyers are supposed to pay service tax and VAT presently while purchasing properties. There are also taxes like excise duty, custom duty etc to be paid by the developer which is then added to the cost of properties. GST bill is proposed to put together all these indirect taxes and replace them with a single tax. This would further reduce the costs in the hand of developers and home buyers as well. The burden on tax payers is expected to come down considerably. On the other hand, the bill will also remove the present unhealthy competition among different states which has led to different practices being followed by developers in each state. Hence such practices and tax paid by home buyers will also become uniform under GST regime."
Mr. Prashant Tiwari, Chairman,Prateek Group said, “GST bill will definitely be a game changer for Real Estate Sector. GST Bill will follow a single tax regime eliminating all the other taxes reducing the overall cost of construction. Under GST bill various taxes on building materials would be merged into one giving direct benefit to the builders which would then be passed on to the end-buyers. Also, it will have a positive effect on the commercial properties as commercial real estate is facing a lot of heat due to lack of funds. GST could boost this property segment as well. We are expecting that GST would help in increasing the GDP growth which would eventually help real estate to flourish in long-term."
Mr. Sushant Mutreja, Chairman, Cosmic Group said, “GST bill once implemented would boost transparency and standardization in real estate sector. Home buyers are supposed to pay service tax and VAT presently while purchasing properties. There are also taxes like excise duty, custom duty etc to be paid by the developer which is then added to the cost of properties. The proposed GST will replace these taxes with a single tax bringing down the cost of construction i.e. all the multiple taxes on procurement side would be replaced by GST. However, the actual impact of GST can only be seen when final rates are decided."
Mr. Zafar Akbar, Chairperson, Exalter Group said “Real Estate sector will be highly benefited with the passage of GST bill as it will be a solution to a sector full of complexes and concerns. The different indirect taxes would be amalgamated into one tax easing the process of taxation considerably both for developers as well as home buyers. It is anticipated that under the GST system, there would be an even flow of credit and current restrictions on construction related credits are expected to be removed as well. Commercial properties are going to get huge benefits with this move as no credit is available on construction of developing a commercial property.”