siliconindia | | November 20168IN MY OPINIONHeadquartered in New Delhi, PHD Chamber acts as the apex organization working at the grass-root level and with strong national & international linkages to promote industry, trade & entrepreneurship.By Mahesh Gupta, President, PHD ChamberREVOLUTION GST: ELIXIR TO ALL REAL ESTATE AILMENTSGST ­ The game changing biggest in-direct tax reform has been approved by the President of India post agree-ment in the parliament by 122nd Con-stitutional amendment, is to be implemented expectedly from April 1, 2017. It is a `destination based' indirect tax reform which aims to remove barriers due to rela-tively convoluted tax structure among states and facili-tate the creation of a single market. With the advent of GST council, government hinted on keeping 50 percent of the essential commodities out of the ambit of tax. As per the recommendations suggested by Arvind Sub-ramanian Panel, a three-rate tax structure with essen-tial goods at 13 percent, demerit goods at 40 percent and remainder goods at 15-17 percent should be made, wherein revenue-neutral tax rate is to be pegged at 15-15.5 percent. Till now, 17 Indian states have already ratified the GST bill.Ostensibly, GST may push up the GDP numbers by approx two percent. Nebulously, warranted growth owing to GST holds the perception that various sectors will have a positive impact. The exact development in the sectors may be conceived only after the finalization of GST rate, meanwhile the prospects seems to be resilient and thriving. Automotive segment is expected to grow back on fall in prices due to implementation of GST. Similar perception is for FMCG, real estate, logistics, and consumer durables, among other sectors. The overall and long run impact of GST on different sectors is significantly ameliorating. Real estate segment contributes to around 7.8 percent of the GDP. Presently, real estate sector works under the auspices of multiple indirect taxes such stamp duty, VAT and service tax. Although the stamp duty will be carried forward, VAT and service tax will be supplanted by GST. RERA or Real Estate Regulatory Act and GST are the two ends of a rope that postulates to pull the real estate sector to new heights. Both the regulations aim to target different areas of real estate, where RERA provides a regulatory framework for the sector, and GST will expedite by ensuring competitive and hassle free business environment. Real estate sector is expected to gain profoundly from the implementation of GST. The tax structure is expected to act as a catalyst in expansion and panacea for its issues. On one hand, GST has been acclaimed by all, while RERA gathered mixed reviews. The act is envisaged to be pro-buyers, which aims to safeguard the interest and investment of buyers. Although the act encompasses all the possible safeguard mechanism for the buyers, it may shoot the house prices up in the short run. With change in policy regime by RERA, the developers are set to face multiple financial impediments right from building to selling. For instance, developers need to submit all the pertinent information such as sanction plans, carpet area, and others to the
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