Bhubaneswar: Recent move by the Centre to cut GST on unfinished residential buildings, which will come into effect on April 1, has not only been welcomed by home-buyers, but also the real estate industry across the country.
The Goods and Service Tax (GST) Council decided February 25 to drop sales-tax on under-construction residential building from 12 per cent to 5 per cent and lower rates on affordable housing to 1 per cent from 8 per cent.
All major developers’ associations here like the CREDAI, REDA and AFORD have claimed that the tax cut would help the country’s troubled housing sector and boost home sales at large.
Speaking to Orissa POST, CREDAI Odisha chairman DS Tripathy said: “It is a welcome step by GST Council. These steps will boost the housing sector by reducing overall GST burden on home-buyers, besides making ease of doing business for developers.”
Tripathy further said that earlier customers were charged 5 per cent or higher towards GST due to uncertainty of claims on input tax credit to developers. “However, after the latest announcement, housing deals will become more transparent as well as easy to charge GST on different housing schemes in a fixed manner. After the new GST comes into effect on April 1, 2019, customers will be able to save more money while buying houses. At the same time, developers will be able to increase their sales through rights offering of the total cost of housing including GST,” he added.
Nisith Ranjan Nanda, Association for Odisha Real Estate Developers (AFORD) president, stressed on the implementation of the decision in a long-term basis.
Nanda said: “Tax cut is good for both the customers as well as the developers. It will definitely boost the real estate business in tier II cities like Bhubaneswar. But the policy implementation should be on a long-term basis so that the customers and developers can avail the benefits. Frequent changes in the policy might create confusion.”
According to media reports, India’s real estate sector is projected to reach $180 billion by 2020 from $126 billion in 2015. It is also reported that the housing sector’s contribution to the Indian GDP is expected to almost double to more than 11 per cent by 2020, up from estimated 5-6 per cent.
President of CREDIA, Bhubaneswar, Kantilal Patel said that after agriculture, real estate is the second highest employment provider in India. So, the contribution of real estate in the GDP of Odisha is immense.
Dipchand Bihari, OP
