RERA acting as a boon has made life much easier for the common man. Structuring this unorganized industry, RERA has eased regulating property matters by the Legislature.
Since RERA has made a great impact in the Real Estate Sector, by focusing on the home buyers' problems. It has ensured that all issues faced by the buyers first & builders next, are properly dealt.
It has gathered such a strong hold on property disputes within two years. Living up to its motto of a smooth functioning Real Estate sector, RERA Act provides:
Fast disposal of cases
Ensures builders reliability
Benefits for stakeholders
Protection from insolvency
Assurance of quality products & services
Interest on the amount, if there is a delay in delivery.
With new changes in the RERA Act every day, the authorities are trying to ensure an optimized rule at every step. As RERA is still very new, the guidelines are subject to improvements.
The Finance Ministry has given new guidelines. As per which, there will be no GST charged on the sale of properties having a completion certificate.
But GST will be applicable for an under-construction property or ready-to-move-in flats without completion certificates.
By passing the benefit of lower GST rate to customers, the Ministry also asked the builders to reduce the prices of properties.
On December 8th, Saturday, The Finance Ministry official in New Delhi said, “It is brought to the notice of buyers of constructed property that there is no GST on the sale of the complex/ building and ready-to-move-in flats where the sale takes place after the issue of completion certificate by the competent authority.”
The Finance Ministry added, “For affordable housing projects like the Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of state governments attract 8% GST, which can be adjusted by builders against its accumulated input tax credit (ITC). After offsetting ITC, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST.”
GST has been introduced after eliminating all taxes and prevent inflation.
It mainly aimed to reduce the tax evasion and real estate has always been a great source of income for the Government.
Over the time, it had been observed that the issue of GST on the purchase and sale of the property had been bothering the public since the time of its implementation.
As per the news published in Financial Express, buyers often complained of builders demanding the GST on the entire sale consideration of property. That too without passing them any benefit of the ITC availed at the purchase of construction material.
To cut down the issues of facing overcharging by homebuyers in the name of statutory taxes, the government said that effective pre-GST tax incidence on real state sector was around 15 to 18%.
In this, newly introduced Clause 171 of the GST Act (pdf) makes it mandatory for any GST registered business to pass on the benefits of the input tax credit to the end users as GST has been designed to abolish the cascading of taxes.
This step will boost more builders to come under the regulation of the RERA Act. Even the ‘ laid-back negligent dealers’ will take the matter of RERA registrations seriously.
Not only is this step beneficial to the buyers but also to the dealers. A clearer picture of investments in Real Estate Sector and shares & projects can be obtained for the next financial budgets.
The elimination of GST from RERA shall make the builder’s to take an active role in the strong implementation of registration and other relevant procedures.
RERA is making sure that you as a buyer, are getting the property at appropriate rates and in better conditions, ensuring to protect your interests.
To make sure that you are updated with the new amendments in RERA or anything else in law, stay connected with MyAdvo!
Just download our legal app and you can have every detail of the law at your fingertips!
Providing you with a detailed directory of lawyers near you in India, MyAdvo eases your search to find the right lawyer and educates you on all the legal terms through its legal news section and blogs.
Because here, we believe in making legal simple!
If you liked the post, do like and follow us on our social networks.
We’d love to hear your opinions on this, so make sure to comment below.
And spread the word ahead!