GST on Real Estate A Boon or A BaneWith the introduction of Goods and Services Tax (GST) for various goods, India is now one step closer to becoming a unified tax market. However, while the impact of GST on various sectors and goods is now known, industry experts are still divided over how GST will impact real estate going ahead as the details for the tax slabs for services is still awaited. GST, which has been one of the longest awaited tax reforms will have a heavy impact on taxes in real estate sector. The real estate sector contributes about 5% to GDP after agriculture. GST might be good news to a new home buyer even if they have to pay slightly more in case the standard is high as it minimizes the scope for double taxation. Since buyers are not liable to pay any indirect tax for the purchase of ready-to-move-in properties, the impact of GST on buyers of resale properties is likely to be very little. In the case of under-construction property transactions, buyers have to pay value-added tax and service tax. With the Real Estate Development and Regulation Act (RERA) also under implementation, developers may need to focus much more on streamlining their processes. Initially there can some issues, but with the implementation of GST India’s attraction will be enhanced as an investment destination by encouraging greater transparency and ease of operation in all property deals. Since the GST is expected to bring down the project cost for developers, this would mean homes would, in fact, become cheaper. There are many taxes and duties that a developer pays on the procurement side, such as Customs duty, Central Sales Tax, excise duty, entry tax, etc. These are subsequently passed on to the final pricing of the units and, thereby, to the buyer. GST’s new rates for taxation will relief end consumers from the hassle of paying several state taxes at different levels, therefore removing the double taxation impact. Also, the implementation of GST will hugely benefit the NRI community towards investment in real estate through the formation of a seamless all-inclusive channel. Current taxation system includes issues of multiple taxation, amounting to indirect taxes and no uniformity.