#Budget2017: GST Rollout Likely Within Deadline
Despite the fact that Finance Minister Arun Jaitley did not elaborate on the rate at which real estate transactions will be taxed under the new Goods and Services Tax (GST) regime while presenting the Union Budget 2017-18, developers and home buyers have reasons to be optimistic.
“The thrust of my tax proposals in this Budget is stimulating growth, relief to (the) middle class, affordable housing, curbing black money, promoting digital economy, transparency of political funding and simplification of tax administration,” the finance minister said in his Budget Speech. “We are committed to make our tax rates reasonable, tax administration fairer and tax base wider,” Jaitley added.
Signals coming from other quarters also led one to believe the troubled sector might expect mercy at least in the initial stages. “In the long run, GST is bound to increase the revenue of both Centre and states, but in the first year itself, it may not be so,” tweeted Financial Services Secretary Hasmukh Adhia.
It is worth mentioning here that when the new regime comes into force, services will be taxed between 5 to 28 per cent, with 12 per cent and 18 per cent as standard rates; reports say the government plans to keep the housing sector under the 12 or 18 per cent tax slab.
“The GST Council has finalised its recommendations on almost all the issues based on consensus and after spirited debate and discussions. The preparation of IT (information technology) system for GST is also on schedule. The extensive reach-out efforts to trade and industry for GST will start from April 1, 2017, to make them aware of the new taxation system,“ the FM said.
For affordable housing has been a focus area of the current government, industry experts have been demanding a lower tax slab for this segment.
"Roti (food), Kapda (clothing) and Makaan (housing) are the basic necessity of a common man. Considering that, the government should treat them as essential items and tax them accordingly. By charging GST at the tax slab of five per cent, the lowest bar set by the government earlier for essential items, the Centre would not only make property more affordable for the common man but also help bring down the total cost of property, which has gone substantially up in the past decade," says Ankur Dhawan, Chief Business Officer-Resale, PropTiger.com.