The realty experts and developers have been demanding the rationalization of GST on properties under construction to encourage sale of properties. Since the buyers would have to pay stamp duty, registration charges and also the GST, it is putting additional burden on the buyers and hence affecting the sale of properties, lament the builders.
The buyers would have to pay GST to acquire properties under construction. That is why, many buyers prefer to read-to-move properties compared to buying properties under construction. The ready-to-move properties are comparatively risk-free. Therefore, to hasten the sale of properties the builders would have to complete the construction, which requires a lot of money. At the same time, the increasing cost of construction, interest on borrowings will add on to the cost of the property. It would be passed on to the buyers indirectly. In this backdrop, the real estate experts have been demanding the rationalization of the GST on properties under construction.
The GST has pushed up the cost of the property. Earlier, there was discount on the GST. Lack of discount is burdening the buyers. Further, they demand the authorities to see to it that the GST amount paid is returned to buyers and give credit on the input costs. The input costs are on the rise due to increase in the cost of construction. Besides, the GST is putting additional burden on the buyers. On an average 15 to 18 per cent of the cost of construction, the builders are not able to pay any input credit. In this backdrop, the 5% GST paid on the sale of units should be reimbursed.
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