The Centre has slashed Goods and Services Tax (GST) rates from 12 % to 5 % on under constructions homes and 8% to 1% on affordable houses, and flat prices are likely to come down, offering much-needed relief to buyers as well as to the real estate developers who have been struggling with lesser demand.
However, the developers in Pune are divided on the latest decision with some saying that the government has not contributed to the homebuyer by reducing the tax collected.
“With affordable housing now being defined within ₹45 lakh budget, more properties qualify for this sweet spot category. The GST cut, coupled with the critical change in definition, will induce more sales in homes falling in this budget range which is a win-win for both builder and the buyer,” said Anuj Puri, chairman, Anarock Property Consultants.
According to Rohit Gera, MD, Gera Developments, reduction of GST for under construction homes is merely a transfer of the tax from the customer to the developer since the input tax credit is done away with.
“The input tax credit system forced smaller contractors and vendors into the tax net and into the formal system. Eliminating the ITC reverses all the gains made and incentivises black money transactions. I wish the government had decided to reduce the GST on cement which at 28% ,” he said. Shantilal Kataria, president CREDAI Maharshtra welcomed the step from the consumer perspective.
{{/usCountry}}“The input tax credit system forced smaller contractors and vendors into the tax net and into the formal system. Eliminating the ITC reverses all the gains made and incentivises black money transactions. I wish the government had decided to reduce the GST on cement which at 28% ,” he said. Shantilal Kataria, president CREDAI Maharshtra welcomed the step from the consumer perspective.
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