Anuj Puri, Chairman – ANAROCK Property Consultants
The keenly-awaited meeting of the Goods and Services Tax (GST) Council, which was supposed to deliver a final decision on the differential tax rates on real estate yesterday, hopes to reach a consensus on the 24th.
This is a critical matter and the outcome will have a notable impact on real estate market sentiment.
The levying of 5% GST (without the benefit of input tax credit or ITC) can help boost homebuyers’ favourable disposition towards making a purchase decision.
While it may not trigger the kind of massive housing sales which the industry sorely needs, it can make a difference.
The crux of the matter is the relative merits and demerits of two propositions – a flat 5% GST without ITC or a higher GST with ITC.
If the Government decides on 5% GST without ITC, here are the impacts on different industry stakeholders:
GST Impact On Home Buyers
Lowering the GST rate can definitely provide a short-term boost for fence-sitting homebuyers to make purchase decisions.