Under the Goods and Services Tax (GST), customers will have to pay a higher price for the flat for the purpose of living. Because, the developers, who have a large number of unsold houses, are planning to put the burden of increased costs on their buyers. However, the cost of the new flat will be reduced. This will provide relief to those developers whose new projects are coming or projects are in the early stages.
Surendra Hiranandani, CMD of the House of Hiranandani said that the developer have some advantage in terms of those plans, which are in the initial stage. In the case of ready-made houses, they will have to bear the burden of tax, because they are excluded from the GST scope.
Rohit Gera, MD of Gera Developments said that the tax on projects under construction of GST will be 12 per cent. This is 6.5 percent more for buyers. He said that there is an option to get input tax credit for companies, but it will not be applicable to ready houses. He said that due to this the developers would either have to bear the burden of tax or it would have to be dropped on the customer or would have to increase the prices of ready-made houses.
Vinod S Menon, CEO of Bengaluru-based Citrus Ventures says that everyone is saying positive things about GST,But when going into the detail, the problem that seems to be seen, is that things are not clear to anyone about it. Menon said, however due to one-third reduction the effective rate is 12 percent.
GST has the option of taking the full tax (input tax credit) tax paid on raw materials, but it will not be applicable to the ready flat. As a result, companies will take the tax burden or put the load on the consumer. In every situation, it is decided to increase prices.
Under GST the effective tax will be 12 percent on under construction project.This will increase 6.5 percent. The actual GST rate on the Realty sector is 18%, but the cost of the land will be kept separate. With this, new flats will be cheap.
After the integration of taxes through GST in the country, there is tremendous confusion in business and consumer. On Sunday, Revenue Secretary Hasmukh Adhia tried to get rid of these misconceptions. He clarified both business and consumer through tweets that the utility bills like electricity and water will not have to give GST twice on payment of a credit card. Adhia has played an important role in making this biggest tax reform in the country. There are seven chapters on the illusion spread among people like this:
Seven GST Misconceptions Busted By Hasmukh Adhia, The Revenue Secretary
MYTH 1. I need to generate all invoices on computer/ internet only.
REALTY 1. Invoices can be generated manually also .
MYTH 2. I need internet all the time to do business under GST.
REALTY 2. Internet would be needed only while filing monthly return of GST.
MYTH 3. I have provisional ID but waiting for final ID to do business.
REALTY 3. Provisional ID will be your final GSTIN number. Start business.
MYTh 4. My item of trade was earlier exempt so I will immediately need new registration before starting business now.
REALTY 4. You can continue doing business and get registered within 30 days.
MYTH 5. There are three returns per month to be filed.
REALTY 5. There is only one return with 3 parts, out of which first part filed by dealer and two other parts auto populated by computer.
MYTH 6. Even small dealers will have to file invoice wise details in the return .
REALTY 6. Those in retail business (B2C) need to file only summary of total sales.
MYTH 7. New GST rates are higher compared to earlier VAT.
REALTY 7. It appears higher because excise duty and other taxes which were invisible earlier are now subsumed in GST and so visible now.
Just looking at those items, where the prices have increased due to more tax. They do not see the input tax credit). – Shastikant Das, Former Revenue Secretary