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GST pain persists for realty

GST pain persists for realty
Highlights

The major tax reform in the country after Independence has completed one year by July 1, 2018 and yet there are some teething problems. Still,...

Tirupati: The major tax reform in the country after Independence has completed one year by July 1, 2018 and yet there are some teething problems. Still, discussions have been going on tax slabs, simplification of filing of returns and on other issues.

The departments of both SGST and CGST have been facing acute shortage of staff. The people on the other hand are feeling the heat in some sectors while in others they could not find any difference. There was a unified opinion that GST has further slapped the moaning realty sector after demonetisation.

The Goods and Services Tax (GST) has affected real estate more as flat buyers have to pay 12 percent tax now instead of 5.7 percent of VAT and service tax in the pre GST regime. For Rs.20 lakhs, flat buyers have to pay Rs.2.4 lakh more towards GST, said the President of CREDAI Tirupati Chapter V Srinivasulu. Buyers are not coming forward to buy flats especially big flats.

``On the whole the sector lost about 30 percent business and real estate sector was worst affected. Though GST burden was there on construction material, we get input tax credit which we are transferring to the buyers to give them some relief. The only way out is to reduce the tax rate”, he maintained. Initially, hotel industry was up in arms because of high tax rates.

The industry has been brought to five percent slab now, irrespective of AC and non-AC categories. Earlier it was 18 percent for AC and 12 percent for non-AC restaurants.

However, the President of Tirupati Hoteliers Association KV Choudari, observed that, catering services should be brought down to five percent. Presently, the food served in the restaurant is taxed at five percent and if it is served in functions it attracts 18 percent tax which is ridiculous and should be altered.

For the first time in 70 years since Independence, textile industry was brought under tax net. After reduction in the tax rate from the initial proposals, it attracts five percent tax which was not being noticed by many while buying clothes.

“But, filing of returns was cumbersome and this sector has many uneducated people. Filing of returns should be made easy and this will enable everyone to pay tax easily”, asserted the President of Cloth and Readymade Merchants Association Pasuparthy Gopinath.

On the other hand, Chamber of Commerce President A Manjunath felt that the whole business activity has come down in the recent years. GST is the main reason for fall in business. Bifurcation of the State and demonetisation are the other reasons.

The CGST Commissioner in Tirupati K Engineer told The Hans India that GST seva kendras help the traders. The department has organised awareness meets and bulk messages are sent to the assesses in English and Telugu.

The return filing was very slow initially, has picked up momentum gradually and reached almost 90 percent now. ``Assesses base has been increased remarkably in the post GST regime to 30,000 from 10,511 in pre GST regime”, he said.

Revenue was also increased to Rs.2,025 crores (from July 1, 2017 to March 31 2018) from Rs.1700 crores in the previous year in the purview of Tirupati Commissionerate. However, the department has been dealing with more assessees with the same staff, it is learnt.

TTD falls under SGST purview and has been paying Rs.1 crore GST per month and almost 95 percent of it comes from cottages rent which the devotees have been paying.

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