The implementation of GST, Or the Goods Service Tax, the biggest indirect tax reform in India came as a surprise for many. Although it focuses on bringing up a single tax on the supply of goods and services subsuming others like VAT, Entry tax, etc, it has put many home buyers in confusion. People intending to make a purchase of homes after April 1, 2019, are clueless, whether to go forward with the old method or to follow the present GST rates with no Input Tax Credit (ITC). Acknowledging this dilemma, here is the list of most frequently asked questions asked by buyers on GST rates.
1. Does property price gets affected by the abolishment of ITC
This will differ based on the scheme of tax applied by the developer. For under-construction properties, if the developer has imposed a GST of five percent after April 1, 2019, the buyers are responsible for paying a tax of five percent without any benefit of ITC. But, a new transition plan has been put forward by the GST council, enabling us to opt for old GST rates with benefits of ITC, if the projects are ongoing till May 20, 2019.
2. Is there a relaxation in GST rates for women
GST goes by ‘one nation, one tax’; hence the Tax rates are uniform for all.
3. Can GST be used for redevelopment?
Yes
4. For under-construction resale’s, who must pay the GST?
The outstanding amount of GST must be paid by the new owner.
5. Does every state get affected by GST?
The importance of GST is that it uniform all across the country, going by the idea of ‘one nation, one tax’.
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