GST Council Meet: In a bid to make life easier, the Indian real estate developers have demanded from the finance minister Nirmala Sitharaman to think of lowering down the GST on raw material if she wants existing two tax slabs of 1 per cent and 5 per cent to give 100 per cent dividends. They said that lower GST on raw material will bring down their input cost leading to price correction that would help home buyers to pay less and for the industry sales growth is directly beneficial for the developers.
Speaking on the matter Avneesh Sood, Director at EROS Group said, “GST for real estate sector was always under scanner as customers had to pay 12 percent GST, which was quite high. For complete transparency and high demand Government of India revised the GST rates which have been beneficial for the real estate sector making the sector sentiment positive and giving boost to affordable housing. I believe 1 per cent for affordable and 5 per cent for the rest of the category is lowest ever GST for real estate. Now, the government should think of bringing down the tax on raw material to ensure a lower burden on developers which in turn will have lower pricing of units for home buyers.”
Standing in sync with Avneesh. Suresh Garg, CMD at Nirala World said, “Modi 2.0 Government is focusing on affordable housing and trying to cater the requirement of all other segments too. Rather than paying the high tax due to various taxes earlier, now we have 2 categories- 1 per cent for affordable and 5 per cent for other housing projects. Revised rate of GST is good for home buyers since they don’t have to pay more than 5 per cent tax that was 12 per cent earlier but the elimination of input tax credit is not a positive step for real estate. However, in the present scenario, those developers who have purchased material in advance for the project are choosing old GST rates with ITC since they will have space to offer a cushion to home buyers. But for new projects, they have to follow the new GST model where 5 per cent will be imposed due to no input tax credit. In my opinion, the option of new GST and old GST with ITC should be implemented and allow developers to choose any one of them.”