GST is likely to boost for­eign in­vest­ment

HT Estates - - FRONT PAGE - Niti Sax­ena feed­back@hin­dus­tan­

How will GST im­pact the re­tail sec­tor in In­dia?

The Goods and Ser­vices Tax (GST) is a con­sol­i­da­tion of all in­di­rect taxes levied by the cen­ter and state re­spec­tively. The mar­kets are gear­ing to­wards per­fect com­pe­ti­tion and in sce­nar­ios like that, we­can­no­tafford to have state bar­ri­ers like road per­mit, en­try tax etc. which ham­per the pro­duc­tiv­ity of a busi­ness. The aim of GST is to elim­i­nate all such bar­ri­ers so that a free flow of goods and ser­vices canbe­madeavail­able. GST will be ap­plied to all goods and ser­vices un­der dif­fer­ent tax slabs which are yet to be made public by the govern­ment.

Af­ter many re­form­ing ini­ti­a­tions like Hous­ing for all and RERA, the next thing that the real es­tate sec­tor is look­ing for­ward to is to the GST. GST will in­cor­po­rate al­most all the in­di­rect taxes levied bystate and­cen­tral govern­ment and will make a sig­nif­i­cant im­pact across in­dus­tries.To­gether with RERA, GST will go a long way in en­sur­ing trans­parency in the realty sec­tor and grow­ing buyer con­fi­dence. GST cou­pled with Real Es­tate Reg­u­la­tory Act that has come into ef­fect on May 1, 2017, would en­sure ef­fi­ciency in the realty sec­tor. GST will free home­buy­ers and­in­vestors fromthe has­sle of pay­ing sev­eral state taxes at dif­fer­ent lev­els, there­fore re­mov­ing the dou­ble tax­a­tion im­pact.

The In­dian Re­tail sec­tor is one the fastest grow­ing in­dus­try in the world. The re­tail sec­tor is boom­ing ev­ery­where be it metro cities or the Tier-II and tier-III cities. The im­pact of GST on re­tail sec­tor is go­ing to be pos­i­tive as it will bring down to­tal in­di­rect taxes, in­crease sup­ply chain ef­fi­ciency and fa­cil­i­tate seam­less in­put tax credit.

Af­ter im­ple­men­ta­tion of GST, state bound­aries will be ir­rel­e­vant from tax­a­tion and doc­u­men­ta­tion point of view. Van­ish­ing state bound­aries will re­duce the com­plex­ity for re­tail­ers and in­crease the dis­tri­bu­tion reach as well as ef­fi­ciency .

The im­mi­nent im­ple­men­ta­tion of GST is ex­pected to re­sult in greater trans­parency, an im­proved flow of credit, and re­duced trade bar­ri­ers from a tax per­spec­tive.

GST is also likely to boost for­eign in­vest­ment and ben­e­fit the NRI com­mu­nity for in­vest­ment in real es­tate be­cause of a seam­less all-in­clu­sive chan­nel avail­able. The sim­pli­fi­ca­tion of tax­a­tion is prob­a­bly the most­pos­i­tive as­pect of GST and it will prom­ise well for for­eign in­vest­ments. It will also raise the con­fi­dence of the NRI mar­ket to in­vest in In­dian real es­tate.

From the con­sumer point of view, the ma­jor ad­van­tage would be in terms of de­crease in the over­all tax burden on goods.

Niti Sax­ena, pres­i­dent, sales and mar­ket­ing, Appu Ghar

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