Sandeep Bisht, Co –Founder Filing Samadhan believes that the clarification issued by the Finance Ministry on Application of GST on Ready-to-move-in properties not having completion certificate is a welcome step. According to him, the new amendment along with the other regulatory frameworks will help both builders and buyers.
This step will encourage the buyers to go for the properties having Completion Certificate and simultaneously create pressure on the builders to construct the properties on given time and obtain completion certificate with the concerned Authority. With this move the government stalled projects will now pick up the pace of construction.
More than 25000 projects were approved under RERA which are on construction phase. Real Estate developers will get the motive to complete the project within time and get the completion certificate, which will ensure timely delivery of the home and also reduce the diversion of funds. Banks will also get their money on time.
GST on Cement remained unchanged in 31st GST council meeting. But during the next GST council meeting GST on cement is expected to come down to 18% from 28%. This will come as New Year gift to the Real Estate developers and the investors. GST on cement rate will also play an important role in shaping the infrastructure industry in the coming years.
India is second largest Cement producer in the world with annual capacity of approx 500 mn tonne. A reduction of 10% GST on Cement will reduce the construction cost in a very significant way, which will attract more buyers.
Another aspect of the amendment will be that ready-to-move-in projects with completion certificates will have more demand. Builders with available inventory will make the most of the opportunity. This will also lead to developers putting in extra efforts to obtain completion certificates, so that they will be able to declare their projects as free of GST.
Sandeep Bisht is a Banking and Finance professional. His area of practice is Banking, Finance, Economics, MSMEs, Accounting, Audit, Corporate Laws, Insolvency and Bankruptcy etc. He has been on the board of various companies and the National Chamber. He has held the Director post at Chamber of Indian Micro Small & Medium Enterprises (CIMSME), Indian MSME Helpline Private Limited and Gyan Shree Industrial Consultants Private Limited. He closely works with the SMEs and well as the Large Corporates to understand their needs and challenges faced by them.