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WHAT IS RERA AND GST, AND HOW IT WILL EFFECT BUSINESS SECTOR
Posted on 16th Sep 2017 18:02:37 in
RERA which was implemented by the Central Government on 1st May 2016. RERA will surely compel realtors to shell out more money. As per the reform, the builders have to upload authentic documents and register their projects with the Real Estate Regulatory Authority. The real estate agents also need to register themselves with the RERA to conduct business and for this, they have to pay a registration fee. The RERA also state that if realtors fail to comply with the rules they will be penalized.
GST will affect all the business sectors of the country including the real estate sector which is already facing major changes due to implementation of( RERA) Real Estate (Regulation & development) Act .Real Estate sector contributes around 9% of India’s GDP and is the second largest employer, after agriculture. With urbanisation being one of the major growth drivers for the sector, with around 10-12 million people moving to the cities annually, the real estate sector is likely to get a further boost from the government with plans like Housing for all by 2022, Pradhan Mantri Awas Yojana (PMAY), 100 smart cities etc.
RERA and GST is facing chaos among the buyers and realtors. They are facing problems due to the lack of information related to the above reforms . The only solution to get rid of this to hypocrisy is by decoding the GST and RERA and by giving authentic information
GST will reduce the price of real estate properties to some extent and will promote good and simple taxation system and RERA will make the real estate sector more reliable due to which Foreign Direct Investment (FDI) will increase GST on realty sector, it will benefit both realtors and real estate buyers. As per the new reforms, there will be 12% GST on on-going projects excluding stamp duty and registration charges. There is no tax on ready-to-move-in and completed projects. The GST will eliminate the VAT and service tax which together use to range from 7% to 9% (varies from state to state) and was difficult for consumers to calculate due to irregularities. The GST makes the tax calculation much simpler as the buyer has to pay only a single tax. The builders will also get the benefits of input tax credit and have to pay only one tax under the GST. The price of cement, paint, plaster, wallpaper, ceramic tiles and wall fittings may go up due to 28% GST which was earlier 20%-24% but the price of materials as iron rods and pillars (GST 18%, earlier tax 20%) and sand-lime bricks and fly ash bricks (GST 5%, earlier tax 6%) will go down. The tax on transportation and logistics are reduced under GST which will lay a huge effect the realty sector.
The RERA has made real estate developers and agents liable for any ambiguities in the business, wherein the buyers are liable to make timely payments as per the sales agreement..
RERA and GST will contribute in the development of our country and will go well together for the real estate sector But if we talk about the brokers of the real estate sector RERA is not good for them ,they has to pay 250,000 as a registration fee ,for them amount is too big . But according to the goverment these rules have been made so that only serious brokers can enter into the market .