The main implication of GST is that it has brought a simplified tax structure. Previously, the buyers had to pay VAT, Service tax, stamp duty and registration charges when purchasing a residential & commercial property under construction. However, for purchase of completed properties, only stamp duty and registration charges were payable. The registration charges, stamp duty and VAT varied from state to state. Earlier due to various types of taxes, the businesses and purchasers had to pay tax on tax which was very complex. To tackle this problem, Government introduced GST. This has introduced positivity among the buyers and investors because of a less complex tax structure.
Under GST, all properties which are under construction will be charged at 12% of property worth. Stamp duty and registration charges are not included in this. For the properties which are complete, the previous provisions will prevail. No indirect tax will be paid by the buyers on sale of ready to move in properties. Thus the implementation of GST has brought in more transparency in taxation and has boosted the sentiments of buyers and investors.
- Simplified taxation
- Transparency and clarity
- Reduced tax burden
- Increased profit margin