The major benefit with GST is with regards to increased input credit on procurement of materials, say Manju Yagnik, VC, Nahar Group

Says Manju Yagnik, Vice Chairperson, Nahar Group: “The implementation of GST has helped in mitigating the surging effect of taxes with construction services specifically being categorised as ‘supply of service’. It has also resolved long standing issues of valuation and nature of supply. The major benefit is with regards to increased input credit on procurement of materials. Under GST, the effective tax rate for construction services is pegged at 12 per cent (8 per cent for specified housing projects) of the entire agreement value, with an abatement of one-third being provided towards land value. Taxation burden is high, and due to the GST regime, the gross tax outflow on investing in a property has seen a steep rise of up to 8 per cent, this is very high in terms of cash outflow. As the impact of GST on property prices is dependent on segmental classification of projects, customers opting for affordable housing projects will reap the maximum benefits. Overall there has been an impact on pricing of residential products which is mostly been subject to demand and supply forces in the market.”