The GST Council’s decision on GST rate in the real estate sector is a welcome move: Mayur Shah

“The GST Council’s decision on GST rate in the real estate sector is a welcome move and will provide an impetus for under-construction property sales. The total transaction cost (stamp duty and taxes) for customers on under-construction property was earlier as high as 18% (6% stamp duty and 12% GST) discouraging buyers from purchasing under-construction property. This will now reduce to 7% and 11% respectively (for affordable and general category). The move is also expected to bring back investors in the market. The decision to allow projects that are under-construction as on 31st March to choose between old rates with Input Tax Credits (ITC) or new rates without ITC is also a good move. For projects at a more advanced stage of construction the loss of input tax credits would have been a big hit on ongoing projects, however this decision now enables developers to transition to the new policy smoothly for new launches. The decision to mandate 80% of goods and services from GST registered vendors is aimed at curbing black money transactions and is a good move, however implementation of this will need to be well planned to ensure minimum disruption to business.” Mr. Mayur Shah, Managing Director, Marathon Group