Now that goods and service tax (GST) Constitutional Amendment has been passed in Rajya Sabha, all eyes are on its implementation which is expected to happen by April 1, 2017.

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 “The Goods and Services Tax (GST) is the most radical taxation reform that is set to alter India’s economic prospects. A single indirect tax, encompassing all goods and services, is surely a welcome change,” said  Anuj Puri – Chairman & Country Head, JLL India.

However, the result of this bill will be visible only after two-three years after its implantation, added Anuj Puri.

GST Bill focuses on eliminating cascading effects of taxes and is structured to drive tax collection by making compliances more flexible and easier for retailers and other business. It further aims in reducing overall taxation levels in India.

As per market experts, the bill will be beneficiary for sectors such as auto, consumer (excluding cigarettes), retailers and logistics.

Well what will be outlook for real estate sector after GST bill implementation?

The real estate accounts for 7.8% of the total gross domestic product (GDP), and is the second largest employer after the Information Technology industry, a Livemint report.

In case of purchasing an under-construction property, presently, the buyer is required to pay both Service Tax of 4.5%  and VAT (value-added tax). Currently, the VAT is charged at 1% in Maharashtra and it varies from state to state.

Also, indirect taxes are paid by the developer during procurement, which further gets develop into cost of an apartment.

Noticeably, the buyer has to pay stamp duty on property transfer which will not be included in the GST bill. In Maharashtra the stamp duty is imposed on 5%, and it differs from state to state.

So what is stored in for the Real estate?

Anup Puri said, “The direct impact of GST on real estate, in terms of tax outflow for developers and consumers, will depend on whether the final GST rate is more or less than the taxes paid currently.”

From the significant reduction in tax management expenses due to a single unified tax, the compliance costs is also expected to go down ahead.

To be noted, the real estate sector shares positive symbiotic relationships with more than 250 other sectors such as cement, steel, IT, BFSI, and many more.

Considering the relation of real estate with other sector, Anuj Puri said, " Any benefit or drawback of  GST on each sector will have an indirect impact on real estate and vice versa. Meanwhile, we may see very limited tangible benefits on the real estate industry but the cascading effects will definitely be higher.