Effect of GST on Indian Real Estate
Keywords: GST, Real Estate, Taxes, VAT.
AbstractThe real estate sector is one of the most important sectors of our Indian economy. It is expected that the Indian real estate sector will reach US$ 1 trillion by the end of 2030. Since it has a very high multiplier impact on the economy therefore, it has proved to be a big driver of economic growth as well. After agriculture, this sector is the second-largest employment generating sector. The real estate industry in India has been growing at about 20% per annum and is contributing nearly 5-6% to Indian GDP. Besides generating high level of direct employment, it has also helped in stimulating the demand in more than 250 ancillary industries such as cement, steel, paint, brick, building materials, consumer durables and many more. Indirect taxability of Construction activities has been tough always and also subject to litigation many a times. Prior to Goods and Services tax (‘GST’) rules, the real estate developers and the buyers had to deal with problems arising from manifold erstwhile taxes such as VAT, Service Tax, Central Excise, Octroi, Entry Tax, Local Body Taxes, etc. In addition, rates of specific state, deemed sales, different valuation for VAT and Service tax, and varied schemes for paying taxes etc. were among the major problems faced by real estate sector. Before GST was introduced in India, the Central Government levied excise duty of 12.5% on almost all the items required for real estate construction. Parallelly, the State Governments charged value-added tax (‘VAT’) from 12.5% to14.5% on the same products. This study aims at researching the detailed impact of GST on the Indian Real Estate Sector.
Copyright (c) 2021 International Journal of Science, Technology and Society
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.