Reaction of developers on passing of GST Bill - M3M Group and ELAN Group

Posted by: at 8/04/2016 03:34:00 am

Reaction of developers on passing of GST Bill - M3M Group and ELAN Group
 Mr. Atul Banshal, President- Finance and Accounts, M3M

Reaction of developers on passing of GST Bill - M3M Group and ELAN Group
Ravish Kapoor, Director, ELAN Group

Mr. Atul Banshal, President- Finance and Accounts, M3M Group

India 04 August 2016: GST appears to be a benefactor for the real estate regime, primarily in light of the expected free flow of credit, which should translate into an increase in margin in the hands of the developer. Seamless and uniform transaction across states will help in cost rationalization.

GST should have a significant impact for commercial property developers, who today are burdened with high costs in absence of credit availability on construction services used for developing a to-be-rented commercial property. It is expected that under the GST regime, there should be a smooth flow of credit and current restriction on construction related credits not being available for offset is expected to be removed.  This would help reduce the project costs in the hands of the developer, which should further have a positive effect on rentals.  If the credit restrictions continue, due to higher GST rates, the project cost are only going to get escalated further.

Besides, it appears beneficial also to end-user or buyers. Uniformity in taxes will help the buyers as well. In the current scenario, several taxes are added up in the cost posing a great difficulty for an ordinary buyer. Implementation of GST will lead to uniformity in taxation rescuing an ordinary buyer from calculation traps designed by the statute." 

GST will primarily affect the commercial property developers the most. This will prove to be a positive for them because this would allow a smooth credit flow and the restriction on construction related credits not being available for offset is likely to be removed. This would decrease the project costs eventually having a positive effect on rentals.


Mr. Ravish Kapoor, Director, ELAN GROUP

This is a really good news. GST will primarily affect the commercial property developers the most. This will prove to be a positive for them because this would allow a smooth credit flow and the restriction on construction related credits not being available for offset is likely to be removed. This would decrease the project costs eventually having a positive effect on rentals."
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