The two-year journey of GST
Authored By Mr Ravish Kapoor, Managing Director, Elan Group
Two years since the introduction of the GST regime and the changes it has entailed in the country’s taxation system is commendable. It is transforming the entire landscape of transactions in the country by replacing the 17 indirect taxes levied at State and Central level. The introduction of GST and the inclusion of real estate in it have helped in reducing the inflow of black money in the sector. The revolutionary tax reform has brought about modernisation in the economy and transparency in the system. This has reduced the cost of tax compliance for business & effective rate of taxation has gone down; thanks to input credit in the GST regime.
GST has helped the cash strapped real estate sector with its underlying theme “One Nation, One Tax” by bringing uniformity in the Indian tax regime. The multi-slab structure enabled the taxations of Goods and Services, which are marked under four slabs being 5, 12, 18 and 28 percent being the highest. The GST council along with the Central Board of Indirect taxes and Customs (CBIC) has tried to simplify the GST process in the real estate sector to make it more impactful.
The real estate sector wants the stamp duty to be brought under the purview of GST to boost the demand for housing, thus enabling absorption of high unsold inventory in the metros. The council should drop down the GST rate of cement and paint which is levied at 28% currently. This swells up construction cost and increases a burden on the end users. The GST portal has been glitch-prone and needs to be revamped to make things simpler and easy to use it.
The GST implementation has also eased the process of doing business in the country. This is expected to attract more FDI investments and help growth in exports. The impact of GST would be better seen in the near future as the time unfolds.
It can be concluded that the implementation of the GST is truly a remarkable achievement for the Indian real estate sector, which will also give impetus to the ‘Make in India’ campaign.