Realty may attract 12% or 18% tax rate under GST
Real estate developers are waiting for clarity on tax structures applicable to them under the Goods and Services Tax (GST) regime, with the sector likely to attract a GST rate of 12 per cent or 18 per cent, according to property consultant JLL India.
“While the goods and services tax (GST) tax structure has been announced, the real estate industry is waiting with bated breath to see which tax rate is applied to the real estate and construction industry,” JLL India chairman and country head Anuj Puri said.
Given the finance minister’s clarification that the highest tax slab will be applicable to ‘sin’ items and other categories that are currently taxed at around 30 per cent, Mr Puri said it can be assumed that this rate will not apply to the real estate and construction industry.
“Similarly, the lowest tax rate of 5 per cent will apply on common use items and is highly unlikely to be applied to housing. That leaves us with two probable scenarios: the tax rate either being set at 12 per cent or 18 per cent,” he said.