Taking the Indian economy to the status of being the world’s fastest growing one was an achievement made possible by a series of positive developments. Among these, India witnessed a series of reforms. In the domain of taxation, Goods and Services Tax (GST) is easily a monumental reform, with positive results.
The intent – reduce a vast number of taxes, levies and duties by subsuming all of these into one GST was the right way forward, and on the second anniversary of its implementation, one acknowledges that reduced categories and types of taxes has definitely been the biggest takeaway.
Going beyond just this aspect, GST is fulfilling the goal of taking India towards the goal of “one country – one market – one tax”. This effectively, brings in standardization and makes it easier to do business across the country. Any new initiative faces teething troubles, and GST has been no different.
Given the initial teething issues, the roll out of GST across India has been successful in its implementation, and it has been adopted across different industries. From the perspective of real estate, the positives are obvious – GST has given a boost to affordable housing as also positively impacted ‘ready to move in homes’.
These are examples of direct impact of GST, there have also been the ‘indirect positive’ to new and emerging real estate asset classes such as warehousing and logistics, given that GST resulted in seamless transport linkages and supply chain efficiency. So, locations which were warehousing hubs simply because they were ‘Octroi-positive’ became history; warehousing and logistics parks are coming up at locations which provide inherent advantages to the logistics industry.
Similar benefits of GST have created new business opportunities in real estate, but there are aspects where delayed implementation is an aspect where a second look is needed. For example, to make GST ‘revenue neutral’, stakeholders in real estate hope Stamp Duty and Registration as also other cess and duties will soon be subsumed. Similarly, the hope is that Input Tax Credit will be extended to commercial and rental leases.
The wish-list exists, and the industry hopes that important aspects of the wish list get fulfilled at the earliest. Having said that, it is equally true that GST is among the positive reforms introduced by the Indian Government, and on its second anniversary, the Indian economy looks towards a positive future under the GST regime.