Goods and Services Tax is a tax policy implemented in India in 2017. According to the policy, consumers have to pay the GST whenever they buy goods or avail any services. There are 4 types of GST - CGST, SGST, UGST, and IGST. But how does GST work in India? Many of us are unable to figure that out. I am going to simplify this for you and will try to explain what is GST and how does it work.
How does GST work in India?Before knowing how does GST work in India, you should know that those who have a business with an annual turnover of Rs. 20 lakhs, Rs. 10 lakhs in special category states.
Want to know how does GST work for a business in India, follow through.
Manufacturer pays GST for raw materials and value added to make the product
Service providers will pay a GST amount for the product and value added to it. However, the service provider will deduct GST paid by the manufacturer earlier while paying the actual GST amount.
Retailer will pay GST for the product acquired by the distributor and add his margin to it. However, he will deduct the GST paid by the service provider while paying overall GST.
Finally, consumers will pay GST for the product.
In the real estate industry; GST works on multiple levels.
GST is payable on maintenance charges for housing societies
GST is payable on the rental income
GST is payable on home loan processing fee, technical valuation fee and legal fee
GST is payable on government housing schemes including Jawaharlal Nehru National Urban Renewal Mission, the Rajiv Awas Yojana, the Pradhan Mantri Awas Yojana and housing schemes of state governments.
Below are the GST rates for different types of real estate properties:
| Type of Property | GST Rate |
Residential Property (affordable housing segment) |
1% without Input Tax Credit |
Residential Property (non-affordable housing segment) |
5% without Input Tax Credit |
Commercial Properties |
12% with Input Tax Credit |
How does GST work?
Bhaskkar
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2021-06-07T17:27:15+00:00 2021-06-07T18:36:38+00:00Comment
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