GST impact: Cost of apartments likely to reduce by 20 percent

Black money component in real estate to come down drastically as construction material will have to be sourced from registered vendors to get input tax credit

With implementation of GST and developers allowed to take free credits of input tax paid, the cost of housing units should reduce by a minimum 20 per cent, a report titled Goods & Services Tax – History in the Making by Liases Foras has said.

Under the GST regime, developers will get an ITC facility for taxes paid by them for both material and services that go into the construction of the project. As per the estimates given by developer community this tax adds up to 20 percent to 25 percent of the cost of a residential unit.