GST is likely to boost foreign investment
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