GST AND REAL ESTATE
Demonetization and GST in short interval made a severe dent in market. Lot of confusion is created in real estate market due to lack of knowledge on part of developers. Most of developers are still resorting to 12 % GST and not passing input tax credit to home buyers. This has led to price increase and thereby defeating the whole purpose of GST. Developers are not understanding the fact that profiteering clause in GST bill will come into force thereby severely impacting their credibility. Some of them are giving excuse that prices of cement and iron has gone up so they are not able to decrease the price but price increase and input tax credit are two different things.
WHAT IS TO BE DONE
They should calculate the input tax credit and pass on the benefit to home buyers which is as per the spirit of GST.Once they have addressed the concern of input tax credit then they can address the price rise in input material. Real estate being in negative territory for long its import that developers don’t do any self goal. Every step need to be taken with sole purpose of creating positive buyer sentiments as they drive the market.
How Technology Will Help In Calculating Input Tax Credit
The Plea developer are taking is that they are not in position to calculate the exact proportion of input tax credit. This is not absolutely true. As someone said GOD is in detail. If the project plan is clear then technology like BIM (building information modeling) can do the needful. So their argument as if not able to calculate input tax credit doesn’t stand tall. It’s all about digging deep.
Desperate time need desperate measure and the same is true with Indian Real Estate too . Buyers confidence is at lowest point and developer should not do anything that would undermine the interest of buyers thereby making recovery more tough and time consuming.