Goods and Services Tax (GST), a Value Added Tax (VAT) yet to be implemented, has been creating a lot of buzz. Here is an insight about what the tax, if implemented, can mean for the real estate buyers.
www.sevagiri.com
In India, at present, taxes are collected at multiple points, such as manufacturing, sale, entry, providing service, consumption etc. It also differs from state to state. Some taxes are levied by the central government and some are levied by the state governments.
This has a cascading effect and ultimately goods and services become costly for the consumers. Multiple registrations, filing returns, assessments and keeping records for different purposes has added complexities to the businesses. This also has resulted in high rate of litigation in the tax matters.
Advocate, Govind Patwardhan, chairman of State Taxation Committee of Mahratta Chamber of Commerce, Pune, explains, GST is intended to integrate and include many indirect taxes such as excise, service tax, custom, central sales tax, VAT, luxury, entertainment etc.
“This will lead to unified tax rates and rules at the pan India level. Taxes paid in one state will be allowed to be adjusted against taxes payable in another state. It is also likely to bring down cost, improve tax compliance and collections. This is also expected to boost India's economic development by breaking tax barriers between the states. It will integrate the country as one huge market like the European Union.
Patwardhan further explains that at present taxes paid under one act cannot be set off as input tax against tax under other act. For instance, service tax is not allowed to be set off against VAT and vice versa. Therefore, the cost of goods and services goes up.
On the contrary, GST will be one tax and hence the tax element in the price of goods and services payable by consumers will come down considerably. This will improve funds inflow from foreign countries. Higher inflow will create demand for various goods and services. Housing, being one of the preferred asset classes, will see a surge in demand.
Source - Magic bricks news
www.sevagiri.com
In India, at present, taxes are collected at multiple points, such as manufacturing, sale, entry, providing service, consumption etc. It also differs from state to state. Some taxes are levied by the central government and some are levied by the state governments.
This has a cascading effect and ultimately goods and services become costly for the consumers. Multiple registrations, filing returns, assessments and keeping records for different purposes has added complexities to the businesses. This also has resulted in high rate of litigation in the tax matters.
Advocate, Govind Patwardhan, chairman of State Taxation Committee of Mahratta Chamber of Commerce, Pune, explains, GST is intended to integrate and include many indirect taxes such as excise, service tax, custom, central sales tax, VAT, luxury, entertainment etc.
“This will lead to unified tax rates and rules at the pan India level. Taxes paid in one state will be allowed to be adjusted against taxes payable in another state. It is also likely to bring down cost, improve tax compliance and collections. This is also expected to boost India's economic development by breaking tax barriers between the states. It will integrate the country as one huge market like the European Union.
Patwardhan further explains that at present taxes paid under one act cannot be set off as input tax against tax under other act. For instance, service tax is not allowed to be set off against VAT and vice versa. Therefore, the cost of goods and services goes up.
On the contrary, GST will be one tax and hence the tax element in the price of goods and services payable by consumers will come down considerably. This will improve funds inflow from foreign countries. Higher inflow will create demand for various goods and services. Housing, being one of the preferred asset classes, will see a surge in demand.
Source - Magic bricks news
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