Impact of GST on Nagpur Properties for Sale

The Goods & Services Tax (GST) ushered an era of unified taxation system across the country. Implemented two years ago in July 2017, GST was looked upon as a game-changer for the Indian economy. It is one of the most radical taxation reforms and a welcome move across sectors as it led to the end of the cascading effect of taxation. It helped people understand tax by simplifying it and facilitating greater tax compliance. GST has a significant impact on the real estate sector, mainly the new projects. Know more about the impact of GST on the property sector at large and in Nagpur in particular.

One Tax for All
GST hails an era of uniform and transparent taxation system in the real estate sector. You can easily identify and understand the taxation component.

Under the earlier taxation system, a buyer and investor had to pay multiple taxes depending on the stage of property construction. If you were to buy an under-construction property, you would end up paying VAT, service tax, stamp duty and registration charges. On the other hand, properties after completion were exempt from VAT and service tax. Moreover, the tax levied varied from state to state.

With the implementation of GST, there is only one tax, which you need to pay, and it will highlight as GST in your property documents. All under-construction properties get charged at 12% of the property value. Other than this, only the stamp duty and registration charges get levied. After the recent amendment in the GST Act, the rate has further reduced to 5%. However, this change will depend on the developer. If the developer goes ahead with the 5% GST slab, then you and the developer will not benefit from the input tax credit.

Reduced Construction Cost
With one tax, input tax credit benefit and uniform tax on logistics, the construction cost has come down and is a win-win the situation for developers and home buyers.
 
As the multiple taxation era ended with the implementation of GST, there has been a decline in the cost of house construction. The property prices have come down in every Indian city, and the trend is visible in Nagpur homes too. Further, what is making buying homes lucrative for investors and buyers is the input tax credit under the GST regime.  

Input tax credit essentially means that the developer can deduct the tax paid on the purchase of the inputs at the time of paying the final tax. For instance, the tax paid in the process of buying different materials can get adjusted from the output tax. This is another significant benefit of GST for the home developer and buyer. In the pre-GST era, the taxes paid on inputs were not waived off from the output tax. Thereby, the developer and buyer had to pay dual tax.

Another prominent reason for reduced construction cost is the applicability of GST on the logistics sector. The transition of goods is easier and smoother with a reduced tax rate.  

If you have been planning to buy a home and pushing it for the tax concerns, then now is the time to take the leap. After two years of the implementation of GST, the teething concerns have got resolved, and now you can benefit from a uniform, easy to understand the tax system and pay relatively less price for a house. 

You can explore new township projects in Nagpur and make the most of the post GST era. If you are looking for a new flat scheme in Nagpur with GST benefits, then pause your search on Vrindavan. The exquisite township designed by Radha Madhav developers will be worth exploring. Spread over acres of land, it comes loaded with amenities and offers an ultra-luxurious living experience. Know more about this best township in Nagpur and book your home today.