The switchover to the GST regime is undoubtedly one of the biggest tax reforms in post-independence India. From July 1 2017, GST effectively cuts through a confounding Gordian knot of taxation complexity in the country. In other words, it replaces the multiple taxes levied by the central and state governments and will become subsumed of all the indirect taxes, including central excise duty, commercial tax, octroi tax/charges, Value-Added Tax (VAT) and service tax.
GST has been predominantly conceptualized around a 'One Nation, One Tax' philosophy and will:
However, the marginal change in the percentage of these variables will make a huge difference as transportation and logistics costs reduce in the single taxation system. While there might be marginal impact on the real estate sector in the near term, we are definitely looking at a significant improvement in buyer sentiment and perception of this sector. Developers too will find the GST regime much simpler to work with, with the benefit of input tax credit being an added advantage.
(The writer is Chairman - ANAROCK Property Consultants Pvt. Ltd.)