India: ‘Biggest tax reform in Independent India’ kicks-in

By APD Writer Rishika Chauhan

NEW DELHI, July 1 (APD) - Goods and Services Tax (GST), which is being called the ‘biggest tax reform in Independent India’ kicked in on the midnight of Friday.

Terming the GST “a good and simple tax”, Modi stressed that it was a modern taxation system, simpler and transparent than the previous one.

“From Gandhinagar to Itanagar, from Leh to Lakshadweep, the dream of one nation, one tax will come true,” he said.

As per the GST, 18 percent tax will be levied on two-thirds of the value of the property, however there is a 12 percent category as well.

Work contracts dealing with construction intended for sale have been classified as a service and were placed in the 12 percent category.

According to some experts, the end consumer of properties under-construction will pay more in most of the India provinces.

“However, the developers will have to reduce the per square foot rate to pass on the benefit of the ‘input tax credit’ that they will avail under the GST regime.

The step should bring back the net outflow amount of the end-consumer to what it was earlier.

It means that as far as prices are concerned there would not go up,” said Sunil Mishra, an expert on the subject.

The price of affordable housing projects will reduce.

According to another analyst, “there is a possibility that places where land price is higher than the cost of construction that prices might go up, however for the majority of the residential market which includes affordable housing, this is a good thing.”

(ASIA PACIFIC DAILY)