There are numerous reasons and grey zones that certainly need to be ironed out way before GST becomes a reality in the real estate sector.

• Uniting 12% GST along with over 5-7% stamp duty, made housing beyond reach of a lot of Indians


• Land the state subject, stamp duty and registration of properties are prime sources of revenue for states


• It certainly remains unclear whether inclusion of the real estate in Goods and Services Tax would basically check tax evasion in property market


• Proffering slab of 5% and 15% for the low-cost as well as other residential projects, correspondingly, may actually sound buyer-friendly but the revenue sharing between the states and the center would be contention bone


Nevertheless, the issue of bringing the real estate sector under GST scope will actually be discussed at next GST Council’s meeting on 9th November 2017. This one particular sector in India where an extreme amount of tax evasion as well as cash generation takes place and which certainly is still outside GST is the real estate sector. There are some states that have been pressing for it. There certainly is a strong case that brings the real estate into the Goods and Services Tax.


Advantages of bringing in the real estate under GST
The real estate market stakeholders are ecstatic with the prospect as tax slab being the discussed is pretty lower than the predominant taxes.

It is being maintained that bringing the real estate under Goods and Services Tax influence will be benefitted the buyers who will only have to pay final tax on the complete product. GST certainly is a good thing to happen as well as the real estate market will welcome this move. From the home buyer’s perspective, RERA will not only bring in transparency but will also reduce the burden in regard to the taxes that are payable at time of home buying. This will not only create any positive sentiment it would certainly boost the sales.

Experts do add in being levied on the already construction services while the land is subject by the states to the stamp duty at the rate which varies between 5-8%. It is being believed that the burden on the home buyers certainly needs to be kept to a minimum especially at the juncture.

Opposition to bringing the real estate under GST
Such optimistic overtones, however, hinge on requirements that GST in real estate market will fall in 5% and 12% slabs.

If at any cost the Goods and Services Tax slab real estate is finalized over 12%, then, the home buyers, as well as the developers, may certainly take a hit especially when the prices of property are unaffordable in numerous places already.

The finance minister, moreover, needs to convince the states to come on board that would create a consensus. This particularly may be tough on the states where the real estate transactions are a prime revenue source for the state through property registrations and stamp duty.

Some states such as Maharashtra have already elevated the objections. The government of the state has opposed the presence in GST of real estate as well as does not want any decision in the matter to be taken in hurry. The Maharashtra government cited that it earns more than Rs 20,000 Cr through the registration charges and stamp duty.

Hence, the stakeholders of the real estate industry are watching the developments pretty closely. They are certainly conscious of the information that if real estate is under GST, it reduces the multiple taxations as well as lessen the complete tax burden on the home buyers and in this process, it will benefit the builders or developers as well. The process, however, seems far from being easy as it includes compensating states for prime source of revenue.