It is speculated that the goods and services tax might bring construction cost lower but not the prices of the house as according to the report by real estate consultancies.
The effective tax rate which was implied earlier was higher which is now 12 percent under the GST. The report stated that “Therefore, it may appear that GST would result in savings of at least three to four percent to the customer. However, the ground-level reality may be different. The cost of land involved in the project significantly impact the ultimate savings the customer may derive under GST”.
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By any chance, the speculated benefits may not surpass 3 percent of the overall construction cost. And this benefit is only applicable to the construction and project which are executed after the implementation of goods and service tax.
The report summarized this part as, “In the case of projects which have already commenced and are nearing completion close to the GST start date, there may not be any significant benefits that the developer can pass on to customers.”
So in order to understand this factor, the benefits will be passed to the buyers who are opting the project and house after the implementation of goods and services tax.
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While it is to be suggested that the decision must be taken after a proper discussion between both the parties i.e. the buyer and builder upon the rate of tax. While the government had been active in this case and has regularly announced regulation and rules for the real estate sector and to aware the buyers before any final decision.
