One of the crucial sectors that substantially contribute to the Indian economy’s growth is the Indian Real Estate. Real estate, after IT industry is the only sector that employs the maximum number of workers in this nation. Though its contributions towards the country are commendable, it was under tremendous pressure of various direct and indirect levies until the Goods and Service Tax (GST) Act was enforced in the year 2017.
GST has played a huge role in rectifying the irregularities caused due to taxation in real estate sector and revived the sentiments of homebuyers in the country. Take a look at the benefits of GST on the Indian real estate market:
1. GST simplified the taxation process by subsuming all taxes and including Value-Added Tax (VAT), Service tax, Customs Duty, Excise Duty, labour charge and various other duties chargeable on services, purchases and procurements under one head – GST.
2. Simplified tax model resulted in a reduced cost of procurement of raw materials and services required for construction by developers. And this cost benefits was passed on by the developers to homebuyers as reduced rate per sq. ft.
3. GST council’s decision on lowering the taxes applicable on affordable housing units from 8% to 1% and for under-construction developments it has been reduced from 12% to 5%.
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