CREDAI welcomes GST
The Confederation of Real Estate Developers' Associations of India (CREDAI) Bengal has welcomed the introduction of Goods and Service Tax (GST) as an act of a major reform since it integrates all the Central and state taxes into one comprehensive tax regime across the country.
CREDAI believes that trade and industry will be major gainers of GST as it eliminates multiple taxations. Separate state and Central taxes and its consequent cascading effects will be eliminated.
"For all the other sectors, GST is total indirect tax liability. But for the Real Estate sector, the GST rate, which has been fixed at 12 percent, is only a fraction of its tax burden. Real Estate sector is exceptional because GST regime does not eliminate multiple taxations. Stamp duty, levied by the states on all immovable property would continue to remain in force even after implementation of GST," said Nandu Belani, president, CREDAI Bengal.
"The additional burden on Real Estate on the account of Stamp Duty averages from 5 percent to 8 percent of the value of the immovable properties. The stamp duty is payable on every transaction. This Stamp Duty is levied by the state government on circle rates or guideline values of the properties which are arbitrarily determined and far from the value at which transaction takes place," the CREDAI president added.
CREDAI president also believes that cost to the consumers would go up unless abetment for the law is allowed. CREDAI would therefore, urge the government to
minimize double taxation of the Real Estate sector by treating land as 'zero rated' under GST regime.
"The positive multiplier effect of Real Estate on other industries would make up the revenue loss and the nation would be thankful for a tax regime consistent with the objective of Housing for all by 2022," Belani said.