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Friday, June 30, 2017

GST : List of items in the 28% slab

List of items in 28% slab of Goods and Services Tax (GST):

  • Sugar and sugar confectionery
  • Cocoa and cocoa preparations
  • Preparations of cereals, flour, starch or milk; pastrycooks’ products
  • Miscellaneous edible preparations
  • Pan masala
  • Beverages, spirit and vinegar
  • Tobacco and manufactured tobacco substitutes
  • Salt; sulphur; earths and stone; plastering materials, lime and cement
  • Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes
  • Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks.
  • Essential oils and resinoids, perfumery, cosmetic or toilet preparations
  • Soap, organic surface-active agents, washing preparations, lubricating preparations
  • Artificial waxes, prepared waxes, polishing or scouring preparations
  • Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations
  • Chemical products
  • Plastics and articles thereof
  • Rubber and articles thereof
  • Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silk-worm gut)
  • Furskin and artificial fur
  • Wood and articles of wood, wood charcoal
  • Paper and paperboard; articles of paper pulp, of paper or of paperboard
  • Headgear and parts thereof
  • Prepared feathers and down and articles made of feather or of down – artificial flowers; articles of human hair
  • Articles of stone, plaster, cement, asbestos, mica or similar material
  • Ceramic products
  • Glass and glassware
  • Articles of iron or steel
  • Copper and articles thereof
  • Aluminium and articles thereof
  • Tools, implements, cutlery, spoons and forks of base metal; parts thereof of base metal
  • Miscellaneous articles of base metal
  • Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof
  • Electrical machinery and equipment and parts thereof; sound recorders and re-producers, television image and sound recorders and reproducers, and parts and accessories of such articles
  • Vehicles other than railway or tramway rollingstocks, and parts and accessories thereof
  • Aircraft; spacecraft and parts thereof
  • Ships, boats and floating structures
  • Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof
  • Clocks and watches and parts thereof
  • Musical instruments; parts and accessories of such articles
  • Arms and ammunition; parts and accessories
  • Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings
  • Toys, games and sports requisites; parts and accessories thereof
  • Miscellaneous manufactured articles
  • Project imports, laboratory chemicals, passengers’ baggage, personal importation, ship stores.
with thanks : India.com : LINK : for detailed news

GST : List of items in the 18% slab

List of items in the 18% slab
The list of items in the 18% slab will be divided into two sections. The first section is the goods section and will name the various items that will be in this slab. However, the second section shall include the names of the various services that will be affected and has been put in the 18% slab.
Goods
The products under the 18% slab are:
  • Trademark
  • Bidi Patta
  • Goodwill
  • Software
  • Biscuits (all categories)
  • flavoured refined sugar
  • pasta
  • pastries and cakes
  • preserved vegetables
  • jams and sauces
  • soups
  • ice cream
  • instant food mixes
  • mineral water
  • tissues
  • envelopes
  • tampons
  • notebooks
  • steel products
  • printed circuits
  • camera
  • speakers and monitors
  • Kajal pencil sticks
  • Headgear and parts thereof,
  • Aluminium foil,
  • Weighing Machinery [other than electric or electronic weighing machinery],
  • Printers [other than multifunction printers],
  • Electrical Transformer,
  • CCTV,
  • Optical Fiber,
  • Bamboo furniture
  • Swimming pools and padding pools
  • Curry paste;
  • mayonnaise
  • salad dressings;
  • mixed condiments and
  • mixed seasonings
  • Footwear costing more than RS. 500
Now coming to the Services part, the top service to be taxed in accordance with the 18 percent slab are:
  • AC hotels that serve alcohol
  • telecom services
  • IT services
  • branded garments
  • financial services
Notably, Rooms with tariff between Rs 2,500 and Rs 7,500 will attract 18 percent of GST, while restaurants in Five-star hotels will also be charged according to the 18 percent slab.
with thanks : India.com : LINK : for detailed news

Sunday, June 4, 2017

GST would match or be lower than the multiple indirect taxes on real estate

Priyanka Parashar/Mint
Goods and Services Tax (GST) is set to get implemented from 1 July 2017. There are different GST rates prescribed for various goods and services, which may impact their cost. A homebuyer will have to pay GST at the rate of 12% to buy a home. We talked to Rajeev Talwar, chief executive officer, DLF Ltd and chairman, National Real Estate Development Council (Naredco), about how GST will impact home prices. Along with GST, we also discussed the implementation of Real Estate (Regulation and Development) Act, 2016 (RERA), and more. Edited excerpts:
How will GST impact home prices?
Real estate sector was heavily taxed and we welcome a single stable 12% GST rate, inclusive of the value of land and with full Input Tax Credits. We are of the view that the actual tax impact under GST would match or would be lower than the existing multiple indirect taxes on the sector. There are a few things where we are still awaiting clarity like whether affordable housing will remain out of the ambit of GST or not, as is the case at present for implication of service tax, or whether there will be any abatement for homebuyers.
If not home prices, will it impact the profit margins of developers?
About margins, again it will be too early to say. But yes, margins will get impacted because when the tax is lower, prices should come down. Maybe some margins do get impacted and maybe in some areas they will remain unchanged. It may impact different segments differently, like affordable or luxury segments, because you have to pay a higher tax on higher-costing products. So maybe in case of luxury housing segment, there could be some impact on margins. But then when you say luxury or the premium segment, then the premium there also exists to take care of it. So, I think, hopefully it will allow a fair play of market forces.
GST is scheduled to get implemented from 1 July. At the same time RERA requires all the ongoing projects to get registered before 31 July. How are real estate developers managing these two big reforms? Do you think a 3-month window to get the ongoing projects registered is less?
No, we don’t think so. We were preparing for all such statutory requirements for long. Besides that, there is enough computerization in India. There are enough digital initiatives. I am sure that the earlier the Act gets implemented the better it will be. It will give time for people to get accustomed to the new ways of working or to the new regime, whether it is in real estate or taxation. I am sure this will not pose a problem.

with thanks : LIVE MINT : LINK ; for detailed news.

GST- A positive development for Real Estate


GST- A positive development for Real Estate

Mahesh Jaising / Prashanth Bhat

Real estate industry in India in the recent past has seen a phenomenal growth, not just in the Tier 1 cities, but even Tier 2 and Tier 3 cities and towns.  The industry is in the cusp of increased regulations, with bills such as the Real Estate (Regulation and Development) Bill, pending for approval in the side lines.  GST is another development that will have a significant impact on this sector.

Even though construction services has been taxable under VAT and service tax for a decade or so, the industry is still plagued with uncertainty on key basic issues that remains unsolved leading to intense litigation, especially on issues like transfer of development rights in land, taxability of joint development agreements, taxable value for goods and services, etc.  While it is expected that immovable property transaction, ie, transfer by way of sale of immovable property after completion, would continue to be outside the purview of GST and be liable only to applicable stamp duties, the proposed shift to the GST regime is expected to usher in the wings of change and wipe the slate clean in a bid for a fresh start on the indirect taxation of all other real estate transactions.  However, the foremost thought in everyone’s mind is whether GST is indeed the solution to an industry riddled with complex structures and issues.  

Today, this industry has two primary levies, Service tax and VAT, with overlap of tax base and constant disputes on the rate of tax, given the multiple options available for discharge of taxes across States.  This has resulted in diverse practices being followed by developers, across geographies and even within each State.  These issues should be put to rest under the GST regime and the practices and positions should be common across India.  Hence, the taxes paid by a home buyers across States should more or less be the same.  

Presently, home buyers pay service tax and VAT on purchase of residential units when booked prior to their completion. There are also various elements of non-creditable tax costs, like excise duty, customs duty, CST, entry tax, etc paid by the developer on his procurement side, which is inbuilt into the pricing of the units.  All these tax costs add upto anywhere between 22%-25% of the price of the units.  The proposed GST should replace these multiple taxes with a single tax and should also ensure smooth flow of credits through the chain.  Hence, it is widely expected that GST should reduce the construction cost in the hands of the developer and thereby aid in reducing or atleast maintaining the current level of prices in the real estate sector.  The only dampner could however be high GST rates (like the 27% GST rate that is doing the rounds) which will offset any possible gains on incremental credits.  Stamp duty is not proposed to be subsumed under GST and hence will continue as it is today.  

with thanks : Money Control : LINK : for detailed news

GST: How it will impact the real estate sector

GST: How it will impact the real estate sector
New Delhi: Implementation of the GST law will have a positive impact on the real estate sector with expected reduction in its tax burden, according to property developers and consultants.
"The enactment of this law will single-handedly solve many of the challenges faced by the real estate sector and help in pulling the sluggish sector out of its long slumber. Heavy taxes that are being paid currently by the developers will automatically go down by a considerable percentage," realtors' body NAREDCO President Parveen Jain said.
with thanks : Zee News : LINK

Wednesday, May 3, 2017

India property developers on notice: Clean up act or go to jail

Under laws that came into force Monday, developers have to use at least 70 percent of sale proceeds to complete residential projects, rather than funnel money to other jobs, and will no longer be allowed to start pre-selling apartments before all building approvals are obtained. Developers who don't comply with the new laws face up to three years in jail. 


The moves are aimed at cleaning up an industry where more than 30 percent of housing projects run at least a year over schedule, and developers are known for corner-cutting tactics such as starting work before all approvals are granted and using sub-standard materials. Developers accused of wrongdoing have seen their shares tumble, even as the main property index has surged this year. 


With thanks : Economic Times : LINK : for detailed news.

RERA: 5 Things You Should Know About India's New Property Rules To Protect Home Buyers

In a relief for home buyers, India has enacted new laws that govern the country's sprawling and overcrowded real estate market with harsh penalties against erring home builders.
Here are 5 things you should know about the new rules.

State-level legislation

While the main real estate act is centralised, individual states will have to ratify their own rules, and will have their own regulatory authorities. However, so far, only 13 states have notified their respective laws to the centre.
Both new building projects and ongoing projects will be subject to the laws, with the exception of certain projects that have already been completed.

Tighter screening of home builders

Home builders including those who have ongoing construction are required to register with their local state regulatory authorities in the next three months, and provide regular updates on the status of the building projects on the regulators' websites.
Builders will be required to deposit 70 per cent of the money they collect from prospective home buyers into an escrow account that will only be used for construction purposes. They will also need to disclose details of exactly when the property will be completed, and how much money they have already collected.
In addition, any new advertising of unsold property for ongoing projects or any major structural changes will need approval from two-thirds of existing occupants or home owners.

No more early bird deals

Home builders can now only advertise property and homes once they have received all the regulatory approvals.
In addition, builders will also have to enter a registered sale agreement if they collect more than 10 per cent of the home value at the time of booking the project.

Penalties for delayed projects

If a builder has delayed a housing project they will now have to either refund the entire amount they have charged, or pay interest on it until the home is delivered to the buyer.
Defaulters will be subject to an interest rate of two percentage points higher than that being offered by the State Bank of India, on the amount already paid.
Home builders that violate the new laws could be imprisoned for up to three years.

Real estate disputes

In case of disputes, instead of going to civil courts, home buyers can now take their complaints in connection to their property projects to special real estate courts that will be set up in each state. This is aimed at speeding up the current redressal process.
with thanks : huffington post : LINK : for detailed news report