GST tax for home buyers as flats nearing completion will now attract a tax of 12percent as against the present service tax of 4.5percent
New Delhi,June17:With less than a fortnight for roll out of Goods and Services Tax (GST), home buyers should brace themselves for a shock as flats nearing completion will now attract a tax of 12% as against the present service tax of 4.5%.
With lacks of Flats nearing completion, the move will impact many home buyers. Inventory of Flats nearing completion in NCR alone is expected to be close to 70,000 units.
Real estate builders, on their part, are likely to make another round of presentation to the Government to find a solution. Builders say the industry can avail input credit only for a period of July 2016 to July 2017, which will lead to additional liability that will be passed to consumers.
“Ideally there should have been a grandfathering clause to ease the burden on flat buyers. We will continue to engage with the Government on this issue,” says Getamber Anand, Chairman CREDAI.
While the anti profiteering clause in GST is meant to ensure that buyers are not subjected to sudden spikes in taxes, builders argue additional liability will be passed on to the consumer.