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What is the GST impact on real estate?


GST is expected to be a sentiment booster for the industry and will seek to revive buyer and investor interest by bringing more transparency in taxation. As the perception of the sector is said to have improved, the prices are likely to drop around one to three per cent if it all they do, according to a report by Edelweiss Securities.


The taxation earlier was too complicated for buyers. For instance, buyers were earlier liable to pay taxes depending on the construction status of the property and the state where it is located. Buyers also had to pay VAT, service tax, stamp duty and registration charges on purchase of an under-construction property. However, if the purchase was for a completed property, the tax applicable were stamp duty and registration charge. Furthermore, since VAT, stamp duty and registration charges were state levies, each state specified its own figures. Service tax was a central levy and was charged on construction. So the calculation of taxes was very tedious in the earlier regime. GST charges all under-construction properties at 12 per cent of the property value. This excludes stamp duty and registration charges. No indirect tax is applicable on sale of ready-to-move-in properties hence the tax will not apply to those. The biggest takeaway is that GST is a simple tax that applies to the overall purchase price.


A developer could take input credits on sale of under construction property against the taxes that are paid by the buyer. Earlier, VAT and service tax used to account for nearly nine per cent of the ticket price of the property. Since that will be lower than the GST applied to the sector, the builder will have to pass on the benefit of the price reduction to the buyer. The price reduction is on account of the input tax credits that the builder enjoys.


Benefit to Developers
If you are a developer, you were earlier charged for Central Excise Duty, VAT and entry taxes collected by the state on construction material costs. Further, you had to pay a 15% tax on services like labout, architect fees, approval charges, legal charges etc. Your tax burden was transferred to the buyer eventually. However, under the new regime, the changes in construction costs are not grave. Furthermore, reduced cost of logistics will result in reducing expenses as well. The input tax credits will also help you increase profit margins and it will be a simpler tax to work with.

Source: - The Indian Express
Date:- July 5, 2017


Welcome to Grandmark

M/S Grandmark, a private limited company registered under the companies act 1956. The company has been incorporated on the 10th day of November 1987. The company has a rich business experience in various fields such as transport, Sponge Iron units, Road construction & Stock broking.


Started by Shri Jagdish Lal Gugnani, the group has come a long way with years of repute & goodwill behind them, the group still upholds the vision & mission for excellence in service. Since then, the company has grown from strength to strength in making each project a memorable one.


With the creation of a comprehensive land-bank, the company has now started capitalizing on the benefits. In last couple of years, the group has successfully delivered more than 2 lakh Sq.feet of residential space. Grandmark Developers has ruled the roost by indulging itself in ventures that give the best of both the worlds. Premium life style and at affordable cost.


The company is presently being managed by highly qualified professionals whose mission is to ensure that the company maintains its high standards in quality construction, timely delivery and customer satisfaction. The company has always strived hard to keep its commitments and thus enjoys an extremely resonant reputation in the construction industry.


“We exist due to our customers - Our existence is dependent on the satisfaction of our Customers”