GST, short for Goods and Services Act, is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India. It will replace multiple state and national level taxes – making for just a single level of taxation. But how will it affect you if you’re a prospective homebuyer? Let’s find out:
One single Tax – less hassle
1. More than 16 different taxes including Central Excise Duty, Service Tax, VAT, CST, Luxury Tax and Purchase Tax will now be bound together by GST. This will bring more clarity to the entire taxation structure.
Goodbye Double Taxation
2. GST will free homebuyers and investors from the hassle of paying several state taxes at different levels, therefore removing the double taxation impact. This will result in almost zero price inflation for the end-users.
3. Developers can now claim tax credits on input materials such as cement and steel. This will help in lowering the cost of the final product, in this case, homes and properties.
Boosting NRI investment
4. The simplification of the tax system is also welcomed by the NRI community – one of the biggest investors in India’s real estate sector.
Reduced processing time
5. To an extent, GST will also reduce paperwork and accounting time as only one single tax needs to be processed and goods don’t have to wait in line for entry tax from one state to another.
All-in-all GST will make things simpler for developers and homebuyers and has a world of benefits that will improve and speed up business decisions.