Consultation India - Pune, Mumbai Real Estate/ Properties Investment, Property Management Services

Jun 26 2017 : The Times of India (Pune) Satyanarayan Iyer Pune   The Centre's proposal of a 12% GST on sale of houses from July 1 has left both real estate players and consumers calculating amounts they have to shell out or pass on. In Maharashtra, GST will be in addition to the 6% stamp duty rate charged by the state. This will mean higher outgo on a headline basis. Experts feel the difference in final pricing will not be over 1-3%. TOI explains various scenarios under the GST regime.Existing levy and GST In Maharashtra, customers now pay 4.5% as service tax and 1% as VAT. They also pay a 6% stamp duty on the cost of the unit. This brings the overall tax rate to 11.5%. Under the proposed GST, there will be a 12% flat tax rate on the cost of a unit, in addition to the stamp duty that remains at 6%. This brings the overall tax rate to 18%. Will overall unit cost rise? By the looks of it, the answer is “yes“. But theoretically , no. This is because

INTRODUCTION GST may bring a lot of relief to the real estate sector.  Supply chain mechanism in real estate sector to be revamped after implementation of GST. Real estate sector is one of the most pivotal sector of the Indian economy. Real estate sector plays a vital role in employment generation in India. It ranks second just behind agriculture.The importance of Real estate sector can be understood with its average 5-6% GDP contribution and stimulating demand for more than 250 ancillary industries. The real estate sector had a substantial growth of 22% in its private equity investments from 2015 to 2016. At the time of the third quarter of 2016, there was a 9% increase in investment for residential properties from the previous quarter. GST Regime For Real Estate Sector GST would bring a lot of transparency in the real estate sector and minimize unscrupulous transactions. Under the current tax laws, VAT and Service tax charged by different  Contractors and excise duty, ent