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Benefits of GST to home buyers – In the next lifetime!

Goods and Services Tax - GST - By: - Puneet Agrawal (Athena Law Associates) - Dated:- 27-10-2016 Last Replied Date:- 27-10-2016 - The GST structure as it stands today shall only result in higher property costs for the home buyers. Non‑exclusion .....

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ssary amendments are brought in. The much promoted and discussed benefit of GST i.e., reduction in costs is not extended to the real estate sector. The ill effects would be equally felt by the industry as well as home buyers. It is a glaring fact tha .....

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e engaged in construction for the developers. The taxes so paid shall become a cost for the developer which would ultimately be borne by the home buyers. Further, the provisions of valuation have been so drafted that it would lead to arbitrary double .....

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wice on the same material i.e. - once at the time of purchase by the developer and second when the same shall be included by the contractor for discharging GST which he shall charge from the developers. Same shall be the fate of various services such .....

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ing effect and would thus be a matter of serious concern, for the homebuyers, for after all developers would pass on his cost to them. The situation is further frustrated by non-exclusion of value of land from the transaction value. In absence of any .....

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e of land. However the provisions of Model GST law doesn t provide for exclusion of land from its purview. On arithmetic application of above issues to a sample transaction in which a buyer, a developer and a contractor are involved, the outcome may .....

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tax and VAT shall be roughly 12.5% of construction value, which totals to ₹ 1,87,500 [12.5% of 15lacs]. Whereas under GST, assuming a tax rate of 18%, tax liability shall be ₹ 9lacs [18% of price of flat- Please note that land is not excl .....

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In other terms, one buying a house worth 50lacs should be ready to dole out another more than 7 lacs as tax, purely due to the structuring of law which could have been avoided. This can be avoided even now in case appropriate action is taken by the d .....

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