GST or the Goods and Service Tax is an indirect tax launched by the Indian government to help us get rid of numerous other taxes at varying steps. The tax came into effect from July 1, 2017, and since then; it is implemented successfully in all of the businesses within the country, though not without criticism.
GST has certainly come a long way, if not at par with the growth of the Steel Manufacturers in India. So, let’s have a quick look at GST itself.
GST in Brief
GST is defined as a comprehensive, destination-based tax, collected at the point of consumption, which is the audience. It is unlike the previous taxes that were collected from the points of origin.
It is important to know that GST is divided into 5 different types of tax slabs: 0%, 5%, 12%, 18% and 28% respectively. All of the products and services are taxed under GST, with the exceptions being petroleum products, alcoholic drinks, and electricity.
Land being one of the most sought-after assets is also hugely impacted by the GST.
Here’s how GST is Affecting Land!
As we have already discussed that the new tax imposed as the only tax, is affecting land severely. Here’s a look at the changes that GST has brought about in the land segment:
Under-developed Projects are More Expensive
If you are opting for an under-developed property, you will surely get the benefits of customization according to your needs but on the cost of a greater GST imposed on the properties. The ready-to-move-in properties, on the other hand, will have a lesser tax imposed on them.
GST exempts the Properties on Lease
If you are thinking to lease your private property, then you don’t have to fret over it. This is because you would be exempted on duty when it comes to GST. However, the same cannot be guaranteed if we talk about the business properties or the private properties leased on business purposes. A tax amount that equals 18% will be levied in the second case, provided that there is an income of 20 lakhs per annum.
The Taxes on Land are Improved
Land is undoubtedly one of the major resources that add up to a country’s gross Domestic Product. The same goes for India. Nevertheless, a whole lot of taxes implied on land is not the best way to go for. Therefore, now that all of the taxes have been grouped into one, it is better with GST than it was anytime before.
It is obvious that GST has achieved a commendable feat in the segment of land; however, it is still under scrutiny for the years to come. You can also check out our blog on GST IN CONSTRUCTION: A COMPREHENSIVE GUIDE, if you are interested to note the effects of GST in the field of construction.
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