February 25, 2023

GST Positive Impact Towards Real Estate Sector

The Goods and Services Tax (GST) and Stamp Duty are two crucial taxes that play a vital role in the Indian economy. GST is a unified tax regime that has replaced many indirect taxes, while Stamp Duty is a tax collected by the respective state governments on various transactions.

Real estate is an important sector that contributes significantly to the Indian economy. The sector has experienced some major changes due to the introduction of GST and Stamp Duty. In this blog post, we will discuss the positive impact of GST on the real estate sector and the applicability of Stamp Duty.

Impact of GST on the real estate sector:

With the introduction of GST, the real estate sector has undergone many changes. Here are some of the positive impacts of GST on the real estate sector:

  • Elimination of multiple taxes: GST has replaced multiple indirect taxes such as VAT, service tax, and central excise duty. The elimination of multiple taxes has simplified the tax structure, making it easier for the real estate sector to comply with the tax regulations.
  • Reduction in tax burden: The GST rate for under-construction properties is 5%, which is lower than the previous tax structure. This has resulted in a reduction in the tax burden on homebuyers.
  • Input tax credit: Real estate developers can avail input tax credit on the GST paid for construction materials and services, which has reduced the overall cost of construction. This, in turn, has led to a reduction in the cost of properties.
  • Transparency: The introduction of GST has increased transparency in the real estate sector. All transactions are now recorded in a central database, which has reduced the scope of tax evasion and fraud.

Applicability of Stamp Duty:

Stamp Duty is a state-level tax that is collected on various transactions such as sale, purchase, and transfer of property. Here are some important things to know about the applicability of Stamp Duty:

  • Rate of Stamp Duty: The rate of Stamp Duty varies from state to state. In some states, it is a fixed percentage, while in others, it is a combination of fixed and variable rates.
  • Payment of Stamp Duty: Stamp Duty is payable at the time of registration of the property. The buyer is responsible for paying the Stamp Duty.
  • Calculation of Stamp Duty: The Stamp Duty is calculated based on the market value of the property or the sale/purchase consideration, whichever is higher.
  • Exemption from Stamp Duty: Stamp Duty is exempted in certain cases such as when the property is transferred to a family member, or in case of transfer of property due to divorce or death.


The introduction of GST has had a positive impact on the real estate sector. It has simplified the tax structure, reduced the tax burden on homebuyers, and increased transparency. Stamp Duty is an important tax that is payable on various property transactions. It is important to understand the applicability of Stamp Duty and the various exemptions available.


Bill of Materials (BOM): Components, Types
Rationalise Revocation of Cancellation of GST Registration under Amnesty

Related Blog Post