Lower tax on raw materials are demanded by Real Estate Developers

In an offer to make life simpler, the Indian real estate developers have requested from the finance minister Nirmala Sitharaman to consider lowering down the GST on raw material if she wants existing two tax slabs of 1 per cent and 5 percent to give 100 percent profits. They said that lower GST on raw material will cut down their input cost prompting price correction that would help home purchasers to save money and for the industry sales development is legitimately useful for the developers.

Talking on the issue Avneesh Sood, Director at EROS Group stated, “GST for real estate segment was constantly under scanner as clients needed to pay 12 percent GST, which was very high. For complete straightforwardness and high demand Government of India revised the GST rates which have been beneficial for the real estate part making the sector beneficial and offering boost to affordable housing. I accept 1 percent for affordable and 5 percent for the rest of the category is most minimal ever GST for real estate. Presently, the government should consider cutting down the tax on raw material to burden on developers which thus will have lower pricing of units for home purchasers.”

Remaining in sync with Avneesh. Suresh Garg, CMD at Nirala World stated, “Modi 2.0 Government is concentrating on reasonable housing and attempting to provide requirement of every single other fragment as well.  Rather than paying the high tax due to various taxes earlier,  presently we have 2 classifications 1 percent for reasonable and 5 percent for other housing projects. Overhauled rate of GST is useful for home purchasers since they don’t need to pay more than 5 percent expense that was 12 percent before yet the disposal of input tax credit is not a positive step for real estate. However, in the present situation, those developers who have obtained material ahead of time for the project are picking old GST rates with ITC since they will have space to offer a cushion to home purchasers. But, for new projects, they need to pursue the new GST model where 5 percent will be forced because of no input tax credit. As I would like to think, the alternative of new GST and old GST with ITC ought to be executed and enable developers to pick any of them.”

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