The government is leaving no stone unturned in the scenario to acquire the mighty powers which will help them to tackle the vast income grounding currently at a peak in the nation. Now the new clause justifies that the government will be charging goods and service tax in the rental income too, but it is highly doubted that this will include the individual rental income. The status is same right now, as the service tax is only levied on the commercial properties leaving the residential parties beside the taxation.
In the bill of CGST, the said statement mentioned that, any kind of leasing or giving the building which includes the commercial complex and for the purpose of business and commerce either fully or partially will be considered as supplying of services. A senior tax consultant at KPMG Waman Parkhi, also spoke that, “in the final rules, the government may exempt residential rental income from GST. The government has introduced the bill which will be followed by detailed rules where exceptions and exemptions are likely to be built in, If the existing system of not taxing rental incomes from residential property under service tax has to be continued, then the same provision of exemption has to be introduced in GST too.”
Read Also: Impact of GST on Real Estate Sector in India
In the current scenario, while applying the service tax on the constructed house, 60 percent of abatement in the total value is given to exit the total value of the land and other raw materials. But now after studying the new tax scheme, it has been cleared that the this would not be happening again. Nangia & Co-Director Rajat Mohan also shared some reviews like, “The government is trying its best to make GST litigation free. The bills very clearly specify that GST would be charged on any lease of land or letting out of the building or construction of a complex, building, civil structure or a part thereof, where whole or any part of consideration has been received before issuance of completion certificate or its first occupation.”
