Applicability of GST on Real Estate: Under-Construction & Completed Property

Feb 21,2020 / By Prahalad Singh / No Comment

GST in India:

The GST journey began in India in the year 2000 when a committee was established to draft law. It took almost 17 years from then to implement GST in the country. The GST bill was passed in the Lok Sabha and Rajya Sabha in the year 2017. On 1st July 2017, the GST law comes into force across the country.

The Goods and Services Tax (GST) Council in the 34th meeting has reduced the GST rate on 19th March 2019 on under-construction houses. For flats rated more than Rs 45 lakh, the new GST rate applicable from April 1, 2019, stands at 5%, against 12% currently.

The GST Council also reduced GST rates on affordable housing to 1%, from the current 8%. In both cases, the builders will not be eligible to claim an input tax credit in the new structure.

This move will give a fillip to apartments under construction in the country, and improve the flow of credit to the real estate sector.

The GST Council practiced a double definition for “Affordable Housing”, based on carpet area and cost. In metro cities, the affordable houses will be defined as a house with a carpet area of up to 60 sq.m. and rated less than Rs 45 lakh. In non-metros, a bigger flat of up to 90 sq.m. would be considered affordable housing, with the price bracket unchanged at Rs 45 lakh.

New GST Rate on Under-Construction & Completed Property
		Rates from 1st April 2019		Rates on or before 31st March 2019
Residential Property		Residential Real Estate Project	Real Estate Project
	Affordable Residential Flats	1%	1%	8%
	Others	5%	5%	12%
Commercial Property	Shops, Office, Godown, etc.	5%	12%	12%

What is Affordable Housing?

Here is the latest classification of affordable housing as per GST Council:

Cost of Property

- up to 45 Lakhs

Carpet Area:

In Metro Cities – 60 Square Meter (645 Sq.Ft)

In Non-Metro Cities – 90 Square Meter (968 Sq.Ft)

If you have already paid 12% on your property, you can not claim it back as the rule is applicable from 1st April 2019.

What are the new GST rates on the construction of residential apartments?

Description	Rate
New affordable housing projects	1%
Ongoing affordable housing projects opting for new rates	1%
Ongoing other than affordable housing projects	5%
Projects with commercial space <15% of total carpet area
New other than affordable housing projects

What is the rate of GST applicable w.e.f 1st April 2019 on the construction of commercial property such as shops, godowns, offices, etc. in a real estate project?

Description	Rate
Commercial space in Residential Real estate Project where the construction has started on or after 1st April 2019 or;	5% without ITC on the total consideration
An ongoing project where the promoter has opted for new rates	5% without ITC on the total consideration
Commercial Space in Real estate Project other than RREP or;	12% with ITC on the total consideration
An ongoing project where the promoter has opted for old rates	12% with ITC on the total consideration

What are the guidelines for certifying that the construction of a project has begun by 31st March 2019?

If the earthwork for site preparation of the project has been completed and excavation for the foundation has begun on or before 31st March 2019, a construction project shall be considered to have been begun on or before 31st March 2019.

Why did India Adopt the system of Goods & Service Tax (GST)?

The main objective of uniting the GST was to reduce the tax on tax or double taxation, which cascades from the manufacturing level to the consumption level. Apart from that, with the increase of international trade in services, GST has become a global standard.

In simple terms, GST is an indirect tax charged on the supply of goods and services. This rule has replaced many indirect tax laws that earlier existed in India. This tax will be a replacement for all indirect tax levied by state and central government. Exports and direct tax such as income tax, corporate tax, and capital gain tax will not be affected by GST. It would apply to all goods other than crude petroleum, diesel, aviation turbine fuel, motor spirit, and natural gas. The company adds the GST to the price of the product, and a customer who buys the product pays the sales price plus the GST. The GST is paid by consumers, but it is sent to the government by the companies selling the goods and services. As a result, it provides huge revenue for the government.

Applicability of GST

As per the current GST law, construction of a civil structure, complex, building proposed for sale is considered a taxable service and subject for GST. Though, GST is only applicable to the construction service if any part of the payment is received before the issuance of completion certificate. This simply means GST is not applicable if the entire consideration is paid after the issue of the Completion Certificate (CC) by a competent authority.

Therefore, if you buy property direct from a builder and you pay any part of the payment to the builder prior to the occupation, GST would be payable on the amount paid. On the other hand, if a property is bought from the owner in a secondary transaction, then there would be no application of GST as the payment is being done after issuance of completion certificate.

GST on Completed Flats

Cases, where completed flats are bought in a secondary transaction, Goods and Service Tax, would not be applicable to such sale transactions. Therefore, it is important to note that GST is applicable only to payments made to a builder for supplying the construction services. Therefore, where completed flats (ready-to-move) or used flats are bought, the subject of supplying construction service does not happen. So, GST would not be applicable to the purchase of completed flats.

GST on flats bought Under CLSS

The Credit-Linked Subsidy Scheme (CLSS) is introduced to give affordable houses to the poor and the lower sections of the society. To become eligible for the scheme, the maximum annual income of beneficiaries is up to Rs 18 lakh. The rate of GST on houses under the scheme will be 8% and not 12%.

Credit-Linked Subsidy Scheme (CLSS)

The property could be bought under the Credit-Linked Subsidy Scheme (CLSS) at the rate of 8% of GST as follows:-

Lower Income Group (LIG)
Economically Weaker Sections (EWS), Middle Income Group 1 or Middle Income Group 2 (MIG-1 & 2) under the Housing for All Mission
Pradhan Mantri Awas Yojana (PMAY Urban)

What is the rate of GST applicable w.e.f 1st April 2019 on the construction of commercial property such as shops, godowns, offices, etc. in a real estate project?

Description	Rate
Commercial space in Residential Real estate Project where the construction has started on or after 1st April 2019 or;	5% without ITC on the total consideration
An ongoing project where the promoter has opted for new rates	5% without ITC on the total consideration
Commercial Space in Real estate Project other than RREP or;	12% with ITC on the total consideration
An ongoing project where the promoter has opted for old rates	12% with ITC on the total consideration

Property purchased with completion certificate issued and sale amount is completely paid before 1st July 2017

In this situation, since the sale amount is completely paid before the introduction of GST, the benefits do not apply. The buyer will have to pay the Works Contract Tax during property buying.

Property purchased with completion certificate issued and sale amount is partly paid before and after 1st July 2017

Let us take an example to understand this situation more clearly. Suppose, you bought a property in 2012 but it is constructed and completed only in 2018. The value of the stated property worth Rs. 40 Lakhs, out of which the value invoiced before 1st July 2017 is Rs. 30 Lakhs. There is also Rs. 10 Lakhs of invoicing after 1st July 2017. That is, there is invoicing before and after the introduction of GST. How will you handle this purchase as far as taxes are concerned?

Before GST, a Service Tax and VAT was being levied on all properties under construction. Hence, there will be a VAT and Service Tax on Rs. 20 Lakhs invoiced before the introduction of GST. After the introduction of GST, the amount payable will be a flat 12% multiplied by the amount invoiced, i.e. Rs. 10 Lakhs in this case.

Property purchased with completion certificate issued and sale value is completely paid after 1st July 2017

In this situation, since the purchase of property has been completed post the introduction of GST, no tax applies.

Impact of GST Rate on Resale properties

Since resale properties are immovable and do not fall under the definition of Goods under GST, there is no impact. It simply means that there would be no GST on the resale of flats after the introduction of GST.

8% GST Rate on Real Estate under CLSS Scheme

To make the housing sector affordable, the government has introduced several housing schemes for the common public and also providing housing loans at subsidized interest rates. Initially, the government reduced the GST on houses bought with these loans to 12%. The CLSS Scheme finally became 8% after the one-third deduction given to the land.

What are the advantages of GST?

GST has mainly killed the cascading effect on the sale of goods and services. Removal of the cascading has hit the cost of goods. Since the GST regime reduces the tax on tax, the cost of goods decreases. Following are the advantages of GST:

Higher threshold for registration
The online simpler procedure under GST
Defined strategy for e-commerce
Controlling the unorganized sector
Increased productivity in logistics
Lesser compliances

Components of GST:

There are 3-taxes applicable under this system: CGST, SGST, and IGST

CGST:

It is collected by the Central Government on an intra-state sale (Eg: transaction happening within state)

SGST:

It is collected by the State Government on an intra-state sale (Eg: transaction happening within state)

IGST:

It is collected by the Central Government for inter-state sale (Eg: transaction happening between two states)

Is there any GST on the resale property?

There is no GST on the resale of flats after the introduction of GST

What changes has GST brought in?

In the pre-GST regime, every purchaser including the final consumer paid tax on tax. This taxon tax is described as the Cascading Effect of Taxes. After the implementation of the GST, this cascading effect has removed as the tax is calculated on the value-addition at each stage of the change of ownership.

Tax calculations in the earlier regime:

Action	Cost	10% Tax	Total
Manufacturer	2000	200	2200
Warehouse adds a label and repacks @200	2400	240	2640
Retailer advertises@500	3140	314	3454
Total	2700	754	3454

Heading towards, the tax burden was passed on at every stage of the transaction and the final liability comes to rest with the customer. This is termed as Cascading Effect of Taxes where a tax is paid on tax and the value of the item remains increasing every time this happens.

Tax Calculations in Current Regime:

Action	Cost	10% Tax	Actual Liability	Total
Manufacturer	2000	200	200	2200
Warehouse adds label & repacks @200	2200	220	20	2420
Retailer advertises @500	2700	270	50	2970
Total	2700		270	2970

In the end, each time an individual is able to claim the input tax credit, the sale price is reduced and the cost price for the buyer is reduced because of the lower tax burden. The final value of the trousers is therefore reduced from Rs. 3,454 to Rs. 2,970, thus reducing the tax burden on the final customer.

What is the GST registration procedure for taxpayers?

Below is the GST Registration procedure for taxpayers:

Remember your GSTIN and your registered mobile number
Visit ewaybill.nic.in.
If you are the first-time taxpayer, you will have to click on ‘E-way bill registration’ to register.
You will have to enter your GSTIN number and press the “Go” button to submit your request.
You will be redirected to a new screen where certain details such as the name of the applicant, the business name, the mobile number and the address of the applicant will be auto-generated. You will then have to select “Send OTP” and enter the OTP you receive on your registered mobile number and verify the same.
Once the OTP is verified, you will have to give your preferred User ID through which you can operate your account.
You will then have to create a password for your account after which your registration on the GST portal will be complete and you will be able to log in anytime.

How Does Goods & Services Tax (GST) System Work?

Most of the country has a single unified or centralized GST system, which means that a single tax rate is applied throughout the country. A country with a centralized GST platform merges central taxes e.g. sales tax, service tax, and excise duty tax with state-level taxes e.g. entertainment tax, entry tax, transfer tax, and luxury tax and collect them as one single tax. Under the GST regime, the tax is charged at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. Inter-state sales are chargeable to Integrated GST.

Who will pay the GST tax manufacturer or consumer?

Suppose, goods manufactured in Karnataka and are sold to the final consumer in Delhi. Since Goods & Service Tax is levied at the point of consumption. So, the entire tax revenue will go to Delhi and not Karnataka.

What is Anti-Profiteering?

As per section 171 of the CGST Act, if there is a reduction in GST rate on the supply of goods or services then the benefit of Input Tax Credit should be passed on to the buyer by the equal reduction in prices. However, if the seller fails to reduce the prices after the reduction of GST rates, the matter will be mentioned as the Anti-Profiteering Authorities.

History of GST in India:

In the year 2000, PM Vajpayee established a committee to draft GST law.
In the year 2004, a task force decides GST must be executed to improve the current tax system.
In 2006, Finance Minister proposes GST introduction from 1st April 2010.
In 2007, CST to be phased out and rates were lessened from 4% to 3%
In 2008, EC finalizes dual GST structure to have a separate tax, legislation
In 2010, a project to computerize commercial taxes launched but GST implementation postponed
In 2011, Constituted Amendment Bill to enable GST law introduced
In 2012, the Standing Committee begins the discussion on GST but stalled it over clauses 279B
In 2013, the Standing Committee tables its report on GST
In 2014, GST Bill introduced in parliament by Finance Minister
In 2015, GST Bill passed in Lok Sabha but unable to pass in Rajya Sabha
In 2016, GSTN goes live as Amended-Model GST law passed in both houses.
In 2017, Four supplementary GST Bills passed in Lok Sabha and approved by the cabinet and final GST Bill implemented on 1st July 2017.

GST 2020 updates

Interest generated from GST late payments will be calculated on net tax liability
Rs.46,000 crore to be raised by the Centre as interest for GST late payment
Data analytics is used to fill loopholes in the GST policy
GST Collection crosses Rs.1.1 lakh crore in the month of January 2020
States could face a revenue gap of over Rs.1 lakh crore after the withdrawal of GST compensation
Higher GST rates on fabrics and mobile phones expected to boost revenue collection for the center
Central GST falls short of the estimate- the CGST collections amounted to Rs.3,38,365 crore
GST circular on BPO-KPO services withdrawn
More than Rs.1 lakh crore in GST collected in November 2019
GST e-invoicing compulsory for businesses with less than Rs.100 crore turnover from 1 April 2020

Data Source: Cleartax and Bankbazar

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Is Indian Real Estate Sector Going to Revive in 2020?

Feb 11,2020 / By Prahalad Singh / No Comment

Real Estate Sector in India

The real estate sector in India has been witnessing weak sales for the last few years, resulting in a sharp drop in its significant contribution to the country’s Gross Domestic Product (GDP). Overall, the year 2019 proved to be a mixed year for the nation’s realty sector as the commercial sector flourished but that was not the case with residential real estate. However, some positivity has been seen in the market as a result of various announcements made by the government last year. Government announcements like NHB raising liquidity for Housing Finance Companies, relaxation of External Commercial Borrowings (ECB) funds, and approval of a Rs 25,000-crore alternate fund have all been made at a positive pace.

Nation’s real estate sector saw a fall after banks limited lending activity post the NBFC crisis in 2018 and the situation worsened further in 2019 to a sharp demand crisis. Not just the real estate sector but a large number of other industries indirectly related to the sector have also suffered the heavy winds of low demand.

Real estate developers, consumers, and investors have been facing the burden of the fall in the housing segment for the last few years. From unsold inventories to incomplete construction to delayed projects, the segments had faced a lot of difficulties that have been pointing to negative sentiments.

In spite of the government’s measures to revive the weak realty market, there has been no positive result except limited growth of just 1% in the year 2019 but far from reaching its full potential.

According to the International Monetary Fund, India’s economy grew by about 4.8% in 2019, a sharp drop from 6.8% in 2018. Similarly, unemployment rose to 7.5% in the last 3 months of 2019.

There is an urgent need to approach the challenge of liquidity suffered by the sector, especially after the NBFC cash crisis. Liquidity will improve sentiment in the market with a regular supply of ready to move-in homes. If the challenge is not tackled on priority, it will block the confidence of developers as well as buyers which may seriously affect the realty sector as well as the economic growth of the country.

Few bold govt measures that could revive the real estate market in the year to come including tax rebate hike, personal tax relief, higher liquidity, better land reforms and fast infrastructure development for raising homebuyer sentiments.

The industry body has also suggested the government to reconcile the Insolvency and Bankruptcy Code (IBC), GST and individual taxes to help increase demand for unsold properties, which increased sharply in 2019.

The reviving real estate sector would also improve overall demand as the sector employs a large number of laborers belonging to lower-income groups. As a result, it could lead to a strong rise in rural demand.

However, it needs to be noted that the measures are not yet sufficient in size and will not be able to cater to real estate developers (small and big) and players in Tier 2 and 3 cities. Most importantly, the measures need to be backed by other factors mentioned below to bring in a proper resolution. Instant step in terms of implementation of several schemes and processes is expected to bring momentum into the sector in 2020.

Budget 2020-21 Fails to Address Major Concerns of Realty SectorFreal estate

It offers a few solutions to revive the nation’s weak economy. The government’s $428 billion budget for 2020-21 considered a series of modest initiatives, including planned investments in new roads and airports and personal income tax cuts, along with an increase in bank deposit insurance to encourage customers worried by high-profile bank failures.

But it offered no large incentive plan to produce more jobs or money in the pockets of India’s 1.3 billion residents, most of whom rarely get their food through farming or work in the informal economy. Nor did the budget offer any additional support for the country’s weak financial institutions.

Few Govt measures that may put real estate back on track in 2020 includes:

Industry Status

For a long time, the real estate market demands an industry status that can help it with finances at a lower cost, especially at times when the availability of funding is a major barrier for the industry.

Single-window clearance

The sector, which is struggling to deal with multiple government offices for project approval, wants a single-window clearance facility to initiate the project implementation faster.

Removal of Multiple Rates or Taxes

Multiple rates or taxes need to be removed into a single standard GST rate.

Incorporation of Stamp Duty under GST

The cancellation of stamp duty or its incorporation under GST.

Lowering Interest Rates

In 2019, the Reserve Bank of India (RBI) reduced the policy rates (Repo Rate) by 135 basis points. But the registered commercial banks didn’t follow the procedure. So the average marginal cost of lending rate (MCLR) of banks has decreased by only 64 bps. The lower interest rates will benefit to decide the existing liquidity crisis and boost housing demand.

Rebate in Income Tax

Rebate in individual income tax will be another help to the sector as it will decrease the financial burden of the buyers and improve their expendable income.

Housing Loan Interest Rates to be Reduced

Interest rates on housing loans also need to be reduced to encourage demand and sales. Restoration of income tax gains on a 2nd home can benefit homebuyers in a big way.

Notional Rental Income

We expect the government to release organizations involved in real estate business from the burden of tax on notional rental income or the period of 1 year should be extended to 5 years. This is pushing buyers away from the market and affecting the sector as well.

Restriction on Home Loan Interest Paid

The govt should also remove the restriction of an additional deduction of Rs 1.5 lakh paid on a home loan up to Rs 35 lakhs with total values not exceeding Rs 45 lakhs.

The government should implement land reforms and amend the acquisition process.

People’s Expectations:

It is expected that the real estate sector will hopefully observe a growth story in 2020. Covering 1,600 projects with 458,000 housing units under the center’s announcement will help in raising buyer confidence and is expected to generate significant employment. We expect the govt to give full support to the sector not just in terms of the announcement but also implementation. The year 2020 needs a device to protect developers from the existing liabilities and stuck projects. It also needs to incentivize stressed projects in various ways.

At the same time, the central government has projected that the economic growth would rebound to as much as 6.5% for the current fiscal year.

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Real Estate expectations from Union Budget 2020

Jan 29,2020 / By Hozefa Sanwari / No Comment

Union Budget 2020 Expectations

The Union Budget 2020 will be presented on 1st February by the Finance Minister, Nirmala Sitharaman. Given the policy reforms undertaken by the government over the past couple of years, the real estate industry is hopeful that the upcoming budget will provide the much-needed impetus. The year 2019 saw the government take numerous steps to help improve market sentiment and revive real estate demand. Reforms such as capital gain benefit, tax exemption on notional rent, incentivizing Affordable Housing, the revised rental income limit for TDS, and thrust on infrastructure growth were highlights of the Union Budget 2019.

This time around, the sector expects the Budget 2020 to lower the GST rates on under-construction projects, increase the NBFC credit liquidity, implement single-window clearances for project approvals, redefine the Affordable Housing price bracket, allocate additional funds for PMAY scheme, and fuel investment in infrastructure.

In this backdrop, Commonfloor conducted a real estate survey on builders across India to capture their expectations from the Budget 2020. More than 300 builders participated in this survey to express their views and expectations.

The majority of the builders (31%) expect the Budget to lower the GST on under-construction projects. GST reduction clubbed with the revival of Input Tax Credit can provide relief to the builders and housing can be made available at lower prices. After the reduction in GST rates in 2019, the government had withdrawn Input Tax Credit. The next key expectation of real estate is to address the challenge of NBFC (Non-banking Financial Company) liquidity. Liquidity will ensure positive momentum with a steady supply of ready-to-move homes. Also, single-window clearances can aid in procuring quick approvals so that project delays can be avoided. In the past few years, Affordable Housing has been the major growth driver. Still, it needs some reforms as currently only those houses are awarded affordable status and subsequently reduced GST rate of 1% which has a carpet area less than 60 sq.m. and falls under the price cap of Rs 45 lakh (GST rate for under-construction house is 5%)

Around 50% of the builders surveyed feel that the increase in Home Loan tax exemption is the primary factor boosting real estate demand. A further extension to the existing 2-lakh tax rebate on home loan interest rates will push the fence-sitters to buy homes. It could result in a higher demand for housing, especially in the affordable and mid-segment categories. Interestingly, “Redefinition of Affordable Housing” and “Income Tax Removal on Notional Rent” got equal responses from the builder community. The abolition of income tax on notional rent from the second self-occupied house benefits those with two houses and encourages home buying.

One-third of the builders surveyed feel that the GST rates are the most vital component hurting homebuyers’ sentiment. Apart from GST, project delays and high property prices are the other factors that affect consumer sentiments. Builders feel that the initial aid of Rs 25000 cr last-mile funding for stalled projects is insufficient for the realty sector and that it needs to be executed on a larger level on a priority basis. Moreover, home loan interest rates and high government taxes such as stamp duty and registration could be reduced to propel demand in the market.

Foreign Direct Investment is a key driver of economic growth and a medium of non-debt finance for any country’s economic development. One-fourth of the builders surveyed responded that single-window clearance will streamline the approval process and can bring about a major boom in FDIs for the realty sector. The next two major factors that can drive FDI are ‘clarity on entry-exit norms’ and ‘stamp duty exemption on FDI transfer’. More FDI in real estate will provide the necessary thrust to the current slump in the market.

Builder Bytes

Ajith Alex George, Director of 42 Estates says, “The real estate category in India requires bold fiscal measures from the union budget. The sector is going through a liquidity crisis with stalled projects across India, an economic booster required for the industry as a whole. Ease of Funding both on the supply and demand side along with quicker processing can again make this one of the key growth sectors. Approvals of projects have gotten better however there could be better clarity on some of the norms and changes in regulations, especially around taxation. Single-window clearance and query handling can make the process easier for the sector.

From the home buyers’ perspective, interest rates on home loans have to be reduced, we have been hearing further reduction on personal tax rates and stamp duties, this can strengthen the buying power of the home buyers which will have a compounding impact on the industry as both residential and commercial projects would get a better demand-side environment. The government is already doing its bit with the PMAY showing good traction, a further increase in subsidy rates for affordable housing can further help percolate this initiative. These steps might give the much-needed boost to the confidence of the developers and buyers alike.”

Mr. Amarjit Bakshi, CMD at Central Park says “Initiatives have already been taken to aid the real estate sector, such as tax concessions and availability of low-cost loans for developers and buyers. Reforms were put into place to promote rental housing as well as boost affordable housing, empowering the middle class and first-time home buyers.

We expect policy changes to boost consumption in the economy and improved liquidity for the industry by easing fund availability for the real estate sector, enabling the sector to come back on track, since it generates more than 6.5% of the GDP. It is expected that to boost investor interest, the limit of home loan interest will be increased. Announcing an industry status to the sector will bring manifold benefits.

Conclusion:

The implementation of the above-mentioned measures will help revive real estate growth to a great extent and give a thrust to home buying sentiments, which in turn will revive the economy. To generate cash flows for struggling builders, it is quite evident that the stress fund will be a big boost, but it would address only a small portion of the stalled projects. The rest could only be addressed by NBFCs and banks.

The real estate sector has long needed an industry status that can help to procure finances at a lower cost, especially now, when credit availability is a major headwind. The momentum of infrastructure development should continue from last year so that growth is decentralized and migration to urban centers remain under check. The real estate sector is optimistic that the upcoming budget will usher fresh stimulus in terms of bold fiscal measures to outperform its growth from last year.

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2019 Festive Offers & Deals on Housing in NCR

Sep 26,2019 / By Prahalad Singh / No Comment

The festive season is deemed to be a favorable time for many of the Indian homebuyers, which developers and builders look to benefit on. It is the time of the year when people want to make new investments and purchases. To catch the sentiment, property developers come up with attractive offers & discounts. These offers & discounts during festive seasons are unique, competitive so that it could suit the target market. From a homebuyer’s viewpoint, this is one of the best periods to look out for their ideal homes, as most of the developers would be competing for their attention through these offers & discounts. Even property experts say that the festive season is the best time to invest in property.

Like every festive season, this time too, the real estate developers of NCR are showering offers and discounts like no EMI until possession, cash discount, free registration and stamp duty, GST waivers, free modular kitchen, free car-parking, iPhones to cars, club membership, registration & stamp duty among others to attract homebuyers back to the market.

Now, if you are planning to buy your dream home or want to invest in property in the national capital region (NCR), we list for you some offers & discounts that you must like to grab this festive season. Let’s check out some of the offers:

Delhi-NCR

Builder’s Name	Offers & Discounts
Gaur Group	Free Registration of Property, Semi-modular Kitchen, Air-conditioning, LED TV, Gold Coin, Refrigerator, Air-purifier, Washing Machine, Armani Wrist Watch among others.
Saya Group	Possession-linked payment plans – 30:20:50
Mahagun Group	GST waiver, Free car parking, Modular kitchen, club membership, etc.
Gulshan Homz	Free covered car parking, Power backup, Club membership, and lease rent.
Bhutani Infra	iPhone, iPad, and LED TV
Urbania Spaces	Dinnerware and Samsung tabs on every booking of 100 sq ft and 200 sq ft at its commercial project.
SG Estates	Monthly rental till possession, Free club membership, LED TV, etc
Spectrum Metro	Assured gifts up to Rs 1 lakh on every purchase and a chance to win Mercedes Benz

What builders do normally to clear their inventories?

Instead of reducing the per square feet (PSF) rate, normally, builders give discounts & offers and freebies to potential buyers. And to attract home buyers, normally builders experiment with the all-inclusive price.

Are these offers and discounts trustworthy?

Sometimes Yes, Sometimes No!! It all depends on the buyer’s bargaining ability. There are a few points which homebuyers should keep in their mind while buying properties during festive season:

Do not hurry for freebies. Give priorities to your requirements.
Don’t fall for the misconception of festive sales. Properties in a specific market are already available at a reduced price. If the builder is promoting the deal as ‘limited offer’, be aware that after the festival season, the benefits would remain almost the same or will be turned into some other offer.
Make out whether you are really saving big with that deal. The overall cost of the freebie and gift is included in the cost of the home. It is the buyers who need to choose which deal or offer suits them the most.
Make sure that the cost of freebies has not been added to the basic cost of the unit and that there are no hidden charges which the builder will ask for later.
If the offers & discounts are appropriate for all units or only select units? Sometimes, non-premium or non-Vastu compliant units are sold at huge discounts.
Figure out the price of the units over the last few months. Sometimes seen value to actual value might differ effectively.

What are homebuyers exactly looking for this festive season?

Homebuyers want a little extra to make a fresh deal this season. They are looking for affordability with modernity. From amenities that match their modern lifestyles including modular kitchens, luxury bathroom fittings, etc. Buyers are more clever than before, and are willing to take 80-85% loan but won’t negotiate with amenities. Good location with entree to lifestyle options like clubs, gym, parking, and markets is important to deal with. This is special from the normal discounts, fee waivers and rent guarantees by builders for festive sale gifts.

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Maharashtra: Property is Expected to Get Expensive as Buyers to Pay Input Tax Credit

Jun 12,2019 / By Prahalad Singh / No Comment

Property Cost in Maharashtra is Expected to Get Costlier as Buyers Have to Pay Input Tax Credit

The Confederation of Real Estate Developers Association of India (CREDAI) in its annual general meeting which was held in Kolhapur on 8th June 2019 has decided to pass the responsibility of Input Tax Credit to buyers. This move by CREDAI is expected to increase property prices in Maharashtra by Rs.200 per sq ft.

Rajiv Parikh, President of CREDAI has informed that a discussion was made which influenced the industry body to take the decision. However, the effective date of the same is yet to be determined. The industry body will follow up with the State government regarding the same.

Shantilal Katariya, Vice-President, CREDAI, has added that builders are paying 13% tax on all construction materials to the government but they are not recovering the same from the buyers. Input Tax Credit is a part of the Goods and Services Tax (GST), which is applicable in case any goods or services are furnished to a taxable person. Builders were not passing this tax to the buyer.

He also added that CREDAI will follow up the government in this concern.

Earlier a resolution was passed in this regard, asking the government to possess equal provision for RERA as all states have different terms under RERA, which was giving difficulty for business.

As per vice-president of CREDAI, builders in Maharashtra are the most affected as the state alone has a share of almost 50% of real estate business due to rapid urbanization. If there will be an equal RERA in all states, it would ensure a smooth business environment.

In another initiative, CREDAI complimented the government’s decision to amend the Land Title Act. However, to avoid litigation in future, search report for land will be prepared by the state government and not a private lawyer. As a result, it will bring down the number of litigation.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. CommonFloor does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

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Category : gst

Applicability of GST on Real Estate: Under-Construction & Completed Property

GST in India:

What is Affordable Housing?

Cost of Property

Carpet Area:

What are the new GST rates on the construction of residential apartments?

What is the rate of GST applicable w.e.f 1st April 2019 on the construction of commercial property such as shops, godowns, offices, etc. in a real estate project?

What are the guidelines for certifying that the construction of a project has begun by 31st March 2019?

Why did India Adopt the system of Goods & Service Tax (GST)?

Applicability of GST

GST on Completed Flats

GST on flats bought Under CLSS

Credit-Linked Subsidy Scheme (CLSS)

Property purchased with completion certificate issued and sale amount is completely paid before 1st July 2017

Property purchased with completion certificate issued and sale amount is partly paid before and after 1st July 2017

Property purchased with completion certificate issued and sale value is completely paid after 1st July 2017

Impact of GST Rate on Resale properties

8% GST Rate on Real Estate under CLSS Scheme

What are the advantages of GST?

Components of GST:

CGST:

SGST:

IGST:

Is there any GST on the resale property?

What changes has GST brought in?

Tax calculations in the earlier regime:

Tax Calculations in Current Regime:

What is the GST registration procedure for taxpayers?

How Does Goods & Services Tax (GST) System Work?

Who will pay the GST tax manufacturer or consumer?

What is Anti-Profiteering?

History of GST in India:

GST 2020 updates

Is Indian Real Estate Sector Going to Revive in 2020?

Real Estate Sector in India

Budget 2020-21 Fails to Address Major Concerns of Realty SectorFreal estate

Few Govt measures that may put real estate back on track in 2020 includes:

Industry Status

Single-window clearance

Removal of Multiple Rates or Taxes

Incorporation of Stamp Duty under GST

Lowering Interest Rates

Rebate in Income Tax

Housing Loan Interest Rates to be Reduced

Notional Rental Income

Restriction on Home Loan Interest Paid

People’s Expectations:

Real Estate expectations from Union Budget 2020

Union Budget 2020 Expectations

Conclusion:

2019 Festive Offers & Deals on Housing in NCR

Delhi-NCR

What builders do normally to clear their inventories?

Are these offers and discounts trustworthy?

What are homebuyers exactly looking for this festive season?

Maharashtra: Property is Expected to Get Expensive as Buyers to Pay Input Tax Credit

Property Cost in Maharashtra is Expected to Get Costlier as Buyers Have to Pay Input Tax Credit