Real estate has always faced a tough road when it comes to taxation. From the days of Sales Tax to the present GST regime, it has been a sector plagued with constant change, complexity, and litigation.
Now, the GST Council has formed a Group of Ministers (GoM) to address some of the most contentious issues impacting the sector:
1. Taxability of development agreements
2. Tax treatment of units allotted to landowners
3. Tax treatment of units allotted to existing unit holders in redevelopment projects
4. Re-introduction of ITC for the sector
5. Revisiting the mechanism for valuation of land
6. Revisiting the limits for classification as “Affordable Residential Unit”
If implemented well, these changes could bring long-awaited clarity and fairness. However, history tells us that while such reforms solve some issues, they often open new grounds for interpretation and litigation.
The key lies in keeping the law and procedures simple — making it easier for taxpayers to comply and for officers to enforce. Simplicity builds trust, reduces disputes, and fosters growth.
The real estate sector is watching closely — here’s hoping this GoM delivers a big, positive revamp that the industry truly deserves.
