No Respite For Real Estate

Shopping for a house has always been tough – whether under the old or the new levy system. Even before the announcement of goods and services tax (GST) on 1 July 2017, real estate developers began coercing home buyers to pay the full cost upfront instead of making monthly repayments to evade the new tax burdens. Part of the reason is that GST on the real estate sector has seen a whopping 7.5 per cent increase, up from 4.5 per cent to 12 per cent. On account of this, developers had sought to advance payment schedules before the GST rollout, which is illegal under law. The finance ministry had to step in to prevent higher tax on installments. Second, there is a lack of transparency over provisions like input tax credit. This tax is charged on real estate developers for purchasing housing materials such as steel, cement, among others. While this was introduced to reduce tax liability...