GST will eventually have a transformatory impact on India’s property market, says Shishir Baijal, CMD, Knight Frank India

Says Shishir Baijal, Chairman & Managing Director, Knight Frank India: "The real estate industry has significant forward and backward linkages with other industries that are pre-dominantly in the informal sector. With the unified Goods & Services Tax (GST) regime, the stakeholders are now witnessing the benefits of integration in the supply chain and the consumer will be the ultimate beneficiary of this landmark reform. Business has benefited with a multitude of indirect taxes on construction inputs being streamlined into one while house buyers have benefited on account of uniformity brought about by GST being levied at a standard rate and on consistent basis of calculation across the country. On ground, the impact of cost benefit varies across markets and product categories. Within the housing segment, house buyers particularly in the low to mid-income housing segment have witnessed a cost reduction on account of both the benefits of input tax credit and lower tax rate of 8 per cent. The premium housing market has witnessed a moderate pressure due to unabsorbed input tax credit. On the warehousing front, consumers have benefitted on account of consolidation of warehouse facilities into large and automated logistics parks. Considering that we have spent just a year in this new regime and the teething problems are being addressed on a regular basis, we are optimistic about the potential of this reform, which will eventually have a transformatory impact on the country’s property market."