After the launch of GST in India, both business people and common men are going crazy alike. They find it hard to understand the impact that GST can have on their profitability and consumer base. Most people think that GST isn’t good for the Indian economy, at least right now. But I contradict a bit here. We are already late, I guess. Most successful countries in the world follow GST that is the one tax, one market system. Again there are a lot of confusions as far as this one rate idea is concerned. Since this is not an out and out tax column lets stick to what we were discussing: Real Estate.
Real Estate is a business where humongous wealth transactions take place. It is a trade that mints hell a lot of money and since all of us deal with property transaction at least once in our life time, this business never dies. So what happens when GST applies on it? To be honest, nothing happens. You are simply paying your service tax under a different head.
Tips to handle GST in Real estate:
The problem is not actually with the structure of tax but with our perspective. We are simply not aware of the techniques to handle GST with ease. As far as real estate is concerned, the things that you have to do to be GST-ready are as follows:
Meet a tax expert:
Try to meet a tax expert and understand how GST works this will help you gain a better clarity on GST and its implications.
Work on agreement basis:
GST taxes construction buildings at 12%. Make sure that you are neither creating a cascading effect or over burdening your consumers, focussing on profits. Your customers and government authorities should see a clear picture of how you work so put them on the papers and feel safe
State the savings:
Both your contractors and clientele should know how much savings they are making under GST. So state their savings expressively.
Be calculative: calculations may slightly vary under GST. So calculate beforehand and be certain of how much you will have to
Calculations may slightly vary under GST. So calculate beforehand and be certain of how much you will have to expend on tax so that you might not go off-guarded.
Get the help of technology: Today all tax filing and related tasks are carried out with the help of software. So keep them updated and make proper use of the technology available. This will make things easier.
So why all this cry?
There are still fair reasons as to why GST can be misleading and scary, and some of them are stated below:
- India is a federal country, which means the power is divided between the state and center. So there will always be a silent tug of war between the state and the center which can have adverse effects on the public.
- It is not about the tax itself, but about the way in which it is getting implemented. If the nation is marching towards one tax it means the idea of cascading tax has gone, which should result in fall in prices. But when the consumer is the ultimate payer, how loyal is the payee? Is he actually reducing the price?
- But the only trouble was that people haven’t recovered from the hit of demonetization, so the implementation of GST rubbed salt into the wounds.