Home buyers are unlikely to be burdened with additional tax outgo and cost from the introduction of GST. Real estate has been brought under the GST ambit partially through work contracts that will be levied a
12% tax, which is likely to keep the impact neutral for homebuyers.
The key indirect taxes levied on real estate are excise duty, value added tax and service tax totaling 9-11%, excluding stamp duty which varies being a state levy.
These, barring stamp duty, would be subsumed in GST under the new indirect tax regime that will also allow input tax credit for developers.
The sector, however, is awaiting clarity on the abatement rate for the land cost.
The final impact to buyers of under-construction properties will be the net effect of savings on currently unabsorbed input taxes and the increment in GST rates over the current tax rates.
Source: Economic Times