Old GST or new reform? What is happening in the Indian real estate market
March 31, 2019 may seem like a date like many others, almost insignificant. But if we include this day in the context of the Indian real estate market, we will understand that instead it represents a real watershed. For residential buildings not completed, by this date it will be mandatory to choose between the old GST (service charge) and the new regime, with a lower rate but no tax credit. This plan has produced a truly unexpected and surprising effect: greater flexibility in the real estate market.
Even the industrial sector has welcomed this option, which we must remember must be exercised within a time frame established a priori and, should there be no positive results in terms of project completion, new tariffs would be applied.
This improvement caused by the possibility of choosing between two different solutions is undoubtedly guaranteed, in the medium-long term, by the immediate elimination of the various operational problems through an immediate a priori analysis.
Specifically, real estate developers who opt for the new GST rates will be obliged to proportionally reverse their incoming credit. Furthermore, according to what was noted by the economists, the reduction of this rate will stimulate customer confidence by creating a close loyalty relationship between demand and supply, obviously triggering a chain reaction that will end with the increase in sales. What if prices should increase instead? Again, the Indian government seems to be particularly optimistic. If in fact a similar situation should arise, due to the new tax structure, the National Anti-Profit Authority will undertake to examine this issue.
Others think that this solution could not help the sector, since while in several ongoing projects a single and continuous payment for taxes was foreseen at the rates of previous years, on a practical level this decision could prove illusory as the new rates yes interest, much more attractive as lower than the previous ones, they would move and convert existing projects, making a substantial loss of capital in the construction sector.
So how does the future look for this country?
Undoubtedly, India has grown very much in all respects in recent years. At the economic, political and social level. The need to open up to international dynamics was undoubtedly the key to Volta, which allowed this country to recover and redeem itself after so many years of crisis. Substantial help was given by foreign investors who, seeing a fertile ground where they could graft real estate projects, decided to become an active part of the Indian economy, generating a considerable increase in national GDP.
The low cost of labor and in general of life in this State, attract the attention above all of Westerners, who in the last few years have not wasted time creating satellite offices in this Nation.
It looks like a bright year for India, so all we have to do is give it a big good luck!
Even the industrial sector has welcomed this option, which we must remember must be exercised within a time frame established a priori and, should there be no positive results in terms of project completion, new tariffs would be applied.
This improvement caused by the possibility of choosing between two different solutions is undoubtedly guaranteed, in the medium-long term, by the immediate elimination of the various operational problems through an immediate a priori analysis.
Specifically, real estate developers who opt for the new GST rates will be obliged to proportionally reverse their incoming credit. Furthermore, according to what was noted by the economists, the reduction of this rate will stimulate customer confidence by creating a close loyalty relationship between demand and supply, obviously triggering a chain reaction that will end with the increase in sales. What if prices should increase instead? Again, the Indian government seems to be particularly optimistic. If in fact a similar situation should arise, due to the new tax structure, the National Anti-Profit Authority will undertake to examine this issue.
Others think that this solution could not help the sector, since while in several ongoing projects a single and continuous payment for taxes was foreseen at the rates of previous years, on a practical level this decision could prove illusory as the new rates yes interest, much more attractive as lower than the previous ones, they would move and convert existing projects, making a substantial loss of capital in the construction sector.
So how does the future look for this country?
Undoubtedly, India has grown very much in all respects in recent years. At the economic, political and social level. The need to open up to international dynamics was undoubtedly the key to Volta, which allowed this country to recover and redeem itself after so many years of crisis. Substantial help was given by foreign investors who, seeing a fertile ground where they could graft real estate projects, decided to become an active part of the Indian economy, generating a considerable increase in national GDP.
The low cost of labor and in general of life in this State, attract the attention above all of Westerners, who in the last few years have not wasted time creating satellite offices in this Nation.
It looks like a bright year for India, so all we have to do is give it a big good luck!
