The recently implemented Goods and Services Tax (GST) is being hailed for the transformative potential that it holds for many sectors of the Indian economy, including the real estate sector. Input Tax Credit is being recognized as one of the most meritorious components of GST that will offer benefits to both real estate developers and home buyers.
What is Input Tax Credit?
Input Tax Credit is a component of GST that ensures that credits will be accrued upon taxes paid at every stage of production or service delivery. As a result of this, GST becomes a tax that is levied only upon the value addition at every successive stage of production or service delivery.
In what way does Input Tax Credit benefit real estate developers?
Real estate developers have noted that different inputs for construction (a variety of materials) now fall into varying tax slabs. This has greatly streamlined the processes of construction and has helped builders move swiftly to complete projects. Moreover, developers are only required to pay taxes for every value addition of construction.
In what way does Input Tax Credit benefit home buyers?
GST has greatly simplified the process of property purchase, making it very easy for homebuyers to understand the paperwork that goes into it.…