GST helpdesk: An expert answers your questions pertaining to the new tax and its impact

While the intent is to streamline the tax administration and bring more businesses in the tax net, it is unlikely GST will have any impact on property prices. The previous rate of 12% on under construction projects might marginally bring down prices in affordable segment owing to input tax credits. 

But it is unlikely that a similar impact will be felt in mid-priced or premium developments. More clarity will prevail once the Centre clears its stand on abatement available for land cost for calculating service tax on under-construction projects. 

This will have an implication on the final prices because if the cost of land is 10% of overall project, there is a possibility of costs not rising much. In major metros, the land cost is almost 50-60% of the total costs, so apartment prices will rise here.