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With the entire nation discussing about GST, it’s surely expected to have some relevance. Why are people actually discussing GST? Is it the hope of the improved economy? Are the prices going to drop after the implementation of GST? Will it ensure more transparency in the real estate sector? Will buying a home become easier? What is GST?

The Goods and Service Tax (GST) is a system of taxation where there is a single tax for goods as well as services. This is an indirect tax reform, which aims to remove tax barriers between states and create a single market. It is perhaps the most important economic reform item on the government’s agenda. It is based on a tax-on-value-add concept which avoids duplication of taxes. The GST when introduced can eliminate all the indirect taxes.

How would GST help consumers?

Presently consumers don’t have a clear picture of what taxes they actually pay. Is it just the VAT which a consumer paid at the time of consumption? The answer is ‘NO’. Before the product reaches the retail outlet, the central government collects an exercise duty, about which there’s no mentioning in the bill.

The GST will allow only one-time collection of the tax at the point of consumption. This could act as a tool or our government to restrict the over-consumption of unenviable goods like cigarettes, alcohol by putting a higher GST. Also, it could prevent users from ambiguities which arise in the form of multiple taxes (VAT, service tax, stamp duty, etc.), especially in the real estate sector.

Will GST make buying homes easier or the other way around?

One of the fastest growing sectors in the world as well as India, the GST is surely going to impact the real estate.

With the proposed introduction of GST, the consumers might get a relief on the number of taxes (VAT, service tax, stamp duty, etc.) by just paying GST and stamp duty and in turn providing relief to the consumers.

Consultants predict that enactment of the GST would result in a lower tax burden on the developers, thereby reducing the construction costs, of which the direct advantage would be availed by the consumers. The housing sector is expected to get affordable which in turn would motivate people to invest more in the real estate sector. One thing’s for sure, that GST would bring a significant change in the lifestyle of a common man.

What’s actually in store for everyone will be realized only when the details of GST will be worked out. Though the government is trying to bring the GST into action by April 2017, but the economists don’t expect it to be implemented by the end of 2017. Still, there’s lots to be done from the Center and the State side before the GST affects us. Everything before that is a mere anticipation.

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