MARIO SCHMIDT explains how RERA and GST will be good for the facade and fenestration segments.
RERA and GST will affect the façade and fenestration industry in a positive manner.
The RERA effect
The industry will benefit as there will be complete governance and transparency; this will ensure buyers get the right product that is good in quality. Delivering the product at the allotted time will make the entire process easy. Ensuring quality and timely delivery of the product will create confidence and credibility for both the developer and the manufacturer.
Now, projects will become more efficient as the builder will have to guarantee that the products installed are of superior quality, else face action. This will be a good move as only reputed companies with good-quality products will survive. And, it will guarantee that the project is efficient and delivered on time. Further, increasing standardisation of product quality will create a market for products that will not just last a few years but at least a decade.
Usually, a building should stand for about 50 years or more; for this to happen, high-quality products should be used. Buyers who invest in an apartment expect it to last for at least 10 years, which usually does not happen and products may last for only a year or so. To assure the quality of products for long-term investment, RERA will help as it mandates a five-year warranty period and a specified timeline.
For our part, we are reaching an international standard by putting this maxim into practice, just like it is practiced in Germany. As a company, we ensure our products follow international standards; this will help our business as competitors producing inferior quality products will have to ensure quality or pay the price.
We presume the biggest positive impact will come from the countrywide uniform tax system - which will be applicable only once for the product. The industry is happy that the new GST rate is only 18 per cent. Further, our product is in big competition with large, unorganised fenestration marked without tax collection on the final product - on-site fabrication of wood and low-end aluminium. Thus, GST will surely be beneficial for the industry. For their part, customers will experience transparency in pricing and uniformity of taxes for goods and services. This will bring down the cost of taxation and there will be no negative impact as the trading will take place between the buyer and producer.
As for demonetisation, it has had its own effect. We work widely with retail customers. When their faith went down from November to January, our bookings went down too, similar to the overall industry and the entire economy. But things have come back to normal. We have largely recovered from the impact and are looking positively towards the future.
About the author:
Mario Schmidt, Managing Director, Lingel Doors and Windows has been with the company since 2006, establishing the company in India and making it one of the top 10 in the industry. He has also helped build new windows, for instance, the smart windows.