New Delhi (IANS) - The GST regime will be a game changer for real estate sector and the 12% GST on construction projects meant for sale to buyers will boost the sector, National Real Estate Development Council (NAREDCO) said. "The GST will be a game changer for industry, including for real estate sector, since it will subsume more than 16 major taxes and levies into a single consolidated tax," NAREDCO President Parveen Jain said.
Additionally, he said, the unified tax regime will stop the unwanted practice of double taxation, which hurt real estate and other sectors, given their cascading effect which inflated prices for end-users.
"NAREDCO further hopes that the GST Council will also address the issues related to affordable housing, which was exempt from service tax in the previous tax regime," Jain said. The body's chairman Rajeev Talwar told the media here on Wednesday, "The heavily taxed real estate sector welcomes a single stable 12% GST rate, inclusive of the value of land and with full input tax credits."
"NAREDCO is of the view that the actual tax incidence under GST will match or be lower than the existing multiple indirect taxes on the sector. The GST rate for work contracts, which will also be offset by input credits, will provide for a seamless and simplified tax policy," he said.
Indian real estate sector is estimated to account for about 5% of India's gross domestic product (GDP) and is considered the second-largest employer in the country, according to an industry report.