Can GST save the real estate sector from its status of being the country’s largest destination for black money? Real estate players are worried that if the GST rate on the sector goes high and if the stamp duty continues in its current form, the sector cannot be saved.
Chances are that 18% tax slab will be applied on real estate sector. If this happens, dealers may go for inventions to evade taxes. Any high rate is an invitation to evade than to pay the tax.
The Parliament has cleared the GST during the budget session, and the tax regime is expected to be launched on 1 July. As per the legislation, land leasing, renting of commercial properties and purchase of under-construction housing projects will attract GST.
The real estate sector is the largest destination of black money. Even prompt tax payers are becoming tax evaders because of high tax rates and institutional trading arrangement in the sector.
Already, the GST Council in its March 31 meeting approved nine sets of rules for the implementation of GST. The Council is expected to meet on 18-19 of May to decide on rates on individual items products. Though the standard GST rates are set at four slabs- 5%, 12%, 18% and 28%, exceptional rates like that on god and commodities on high consumption is expected.