The recent implementation of GST has certainly brought some changes in the real estate market. And after the finalization of the rates of this particular tax regime, we are yet to decide on the impact of this change in the different sectors. And especially on the construction projects that are on an introductory level. This is a really important task to decide the impacts of GST on the under-construction projects as it is believed that the cost could be lowered due to it.
The Impact Of GST On The Under-Construction Projects
As you all know, GST has been implemented as a replacement to the multiple tax paying levels and to create a more uniform market for the buyers. There are certain changes that have been made and the under-construction projects also come under that change.
Apparently, the tax regime proposed an18-28 percent tax on the construction materials. And that tax percent can vary from material to material.
Also, any property that has a complex construction project going on is to be sold to the buyer at 12 percent tax credit on the whole. That means the overall cost of the construction might come down a notch. But the area still needs some more clarity on that front. Also, a thing to consider here is the non-uniform reign of GST in different states that have varying state tax laws. With such unclear information, it is really a difficult task to decide whether or not GST will be able to reduce the cost of the residential and the commercial segments that buyers are looking for.
All said this is true that in spite of having such issues in the first place, this new trend of GST will surely enhance the investment sector in India and assure a much more transparent and uniform market where there will be an ease of operation thus bringing a positive change in the economy of the country.