‘GST should bring real estate prices down in Pune by ₹600 to ₹700 per sq ft’
The enactment of the goods and services tax (GST) should bring down the price as the developers will get offsets on raw material used during construction, says Surendra Mankoskar, additional commissioner, central excisepune Updated: Jul 02, 2017 14:16 IST
The enactment of the goods and services tax (GST) should bring down the prices of real estate as the developers will get offsets on raw material used during construction, said Surendra Mankoskar, additional commissioner, central excise, adding that the new tax has provisions to act against those profiteering.
According to Mankoskar, prices of real estate in Pune should come down by ₹600 to ₹700 per square feet as set off is available in 160 different items used for construction. Mankoskar’s remarks contradict what the real estate body has been maintaining about the prices of flats. According to CREDAI, builders body, the impact of GST will be felt only after some days.
“At this point we cannot predict. Construction cost is not likely to come down,” said Shantilal Kataria, President, CREDAI. According to Kataria, the price of flats depends on various factors including stage of construction, sale and amount received from sale.
Even as developers have maintained that prices won’t come down in near future, the central excise department has made it clear by putting the anti-profiteering clause in the GST act. The new act inserted recently can deregister a firm if it is not passing the benefits to the customers.
Mankoskar while speaking at the ‘Meet the Press’ programme organised by the Pune Union of Working Journalists (PUWJ) said, “In our interaction with the real estate players, we have already made it clear that the GST bill has an anti-profiteering clause which can be used against real estate developers who do not pass on the benefits of lower rates to customers.” The circular has already been issued in this regard, he said.
On jewellers claiming increased price of gold with 3 % GST, Mankoskar said there will not be much difference in the metal prices as previously there was excise duty, VAT and local tax, which together was around 4%.
“Jewellers in Pune are claiming that after GST, prices of gold and silver will increase. This is not true and customers should confront the jewellers. The GST has already scrapped all other taxes which were more for gold,” he said. In Pune, before GST customers had to pay 1% excise, 1.2% VAT and 1% local body tax for gold.
The central excise department has converted more than 85% traders into the GST ambit and the process is on to bring others also in the new regime’s net.