GST fallout: You may have to pay more for under-construction property from April next year
Implementation of the GST law will make a negative impact on the under-construction properties with expected rise in its tax burden.
Zee Media Bureau
New Delhi: Implementation of the Goods and Services Tax (GST) law will make a negative impact on the under-construction properties with expected rise in its tax burden, according to a financial daily.
As per a report in the Economic Times, prices of under-construction apartments may rise by varying between 5 and 10 percent.
However, it will not impact the prices of completed apartments as those are out of GST purview, the ET said.
Explaining further, ET said, if you have “already bought a flat but the entire payment has not been made, you will be charged tax at the GST rate on the remaining amount to be paid, which is likely to be between 12% and 18%”.
The passage of GST Bill has been widely expected to be a harbinger of change for the real estate sector which is currently plagued with a myriad of indirect tax issues both at the centre and state level.
GST, which will subsume over a dozen central and state levies including excise duty, service tax and VAT, was recently passed by Rajya Sabha.
Government looks to implement the GST from April next year, with Arun Jaitley admitting that the tax rate will be "optimum" even as there were indications that it may be higher than 18 percent.