After the rude shock of demonetization in November 2016, the country was trying to recover from the setback, when other short-notice policies further slowed down the pace of sales in almost all the cities. Even cheaper home loans could not push homebuyers to make a purchase. And here the much-awaited revolutionary tax has been introduced and it has almost been six months since this event took place.
Well, can you give it a guess? Yes! It is the Goods and Services Tax (GST). GST goes with the motto of ‘One Nation, One Tax’. It seeks to transform India by getting rid of the complex and vague tax structure which is still prevailing in our country.
I’m pretty sure such a reform hasn’t been implemented or come across since several decades and its prime motive is to make sure the tax regime goes by seamlessly.
GST has impacted a lot of sectors and industries. It did shake up the country initially! It has not only changed the entire way one dealt with consumers and businesses but has a left a huge impact deep inside the real estate pockets. Guessing why? Well, Real Estate contributes about India’s GDP and after the IT industry; it is indeed one of the second largest employment generators.
I feel that it has not only helped us come out of the huge slumber but has brought about more transparency in the overall functioning.
Not only did it leave the industry and stakeholders struggling amid the slump, it also caused confusion over deadlines, compliances, and encumbrances. One can say that developers did get a breather after the real estate law came into force in June this year. However, the states took a lot of time to frame state-specific draft rules, get the approvals and then set up the state regulatory authorities. In the meantime, developers struggled to divide their attention between their unsold inventory and compliances.
However, another problem that concerns the realtors is that of compliance as they are required to file the returns thrice a month. This makes the filing of returns both tedious and difficult for businesses with less number of accounting professionals. Realtors also look forward to a legal mechanism to deal with protection against defaults.
With more and more FDI, government schemes and transparency, the real estate sector in India is set to change dramatically. Though there are challenges and opportunities for developers and home buyers, according to which they need to plan out for easy flow and have a positive long-term effect.
Since its implementation from 1st July 2017, initially, it truly stressed out some of the taxpayers and suppliers and dealers due to its long compliance requirement. However, it has been a roller-coaster ride for all stakeholders but it did discipline a lot of them with stringent rules and penalties for violations. Industry experts believe that 2018 would be an interesting year with sales picking up in a few months from now.