GST and RERA in transition to streamline real estate
The transition of the real estate sector to the new business environment after the implementation of Real Estate (Regulation and Development) Act and the Goods and Services Tax is expected to last a bit longer as the industry per the present market scenario. For buyers, it’s the right time to go for a property. The prospects for the business are brighter as GST and RERA will bring in a lot of systemic checks and streamline process.
RERA implementation has brought home a number of challenges for the developers as it prohibits pre-launch sales and discourages sellers to sign agreements with buyers before getting their projects listed under RERA. Undoubtedly, it has been the biggest reform, which has come in real estate sector in a while. This law has seen mixed reviews from developers as well as home-buyer. The RERA act has well encapsulated the features to safeguard home-buyers interest completely but in doing so it has proposed certain changes that are likely to impose financial challenges on the developer which eventually might be burdened on a home-buyer itself.
Also, with the launch of GST, contract price in effect would reduce due to elimination of excise duty and subsequent taxes on it. However, final cost to compete with taxes will depend on the total configuration of material involved in the project by computing the individual items and summing it up. The GST will subsume multiple indirect taxes and it will simplify tax compliance and minimise the scope for double taxation. So, the home buyers can relax as even if they have to pay slightly more in case the standard GST rate is high.
RERA and GST both offers different ease to the sector while RERA aims to bring in a regulated system for sector’s growth, GST aims at easing the overall business and making it hassle-free, be it for developer or for a consumer.