kolkata credai bengal president belani group chairman nandu belani welcomes introduction of goods and service tax excerpts from the interview what according to you would be the impact of gst on the states real estate industry as per the new regime gst is not levied on readytomove in apartments but on underconstruction properties how will this impact both developers and buyers i welcome the introduction of gst as a real estate developer as well as a member of credai bengal it is a major act of reform since it integrates the central and state taxes into one comprehensive tax across the country developers are trying to assess whether the new tax regime will be able to reduce the complexities and ensure a level playing ground for both buyers and developers under the new tax regime under construction properties will be taxed at 18 with 13rd abatement of the land cost the effective rate will be 12 which will be shared by the centre and state in equal proportion this abatement would be attributable to the value of land or undivided share of land it is thus a deduction and not an abatement if considered as per the language derived from the notification this deduction however is also very subjective as the impact of the same depends on the value of the land value of the land differs depending on location if the land is at prime location it will cost much more than 13 of the sale price the high cost of land attracts higher cost factor without input tax credit benefits on the land component which would ultimately increase the costs of the product which would impact the buyer it appears transitional credit can be claimed only on unused stock and not the materials already used though gst act is allowing taking cenvat credit on semifinished goods but there is still no clarity whether projects under construction in the books of the developers will be treated as unfinished stock or not for the sake of availability of credit the option of getting full input setoff credit that developers enjoy on underconstruction projects would not be applicable on readyto movein flats this could effectively mean higher costs for homebuyers of readyto movein flats post gst whatever the developer receives in terms of incremental input tax credit on the ongoing projects it will have to be passed on to the customer to avoid the application of antiprofiteering clause under the gst act has credai national or credai bengal written to either central or state government to revoke and consider the matter if yes what benefits has credai sought from the authorities while credai national has made representation to the central government credai bengal too has voiced their concerns as far as gst exemption on affordable housing is concerned developers have sought exemption from gst for affordable housing along the same lines as the exemption from service tax accorded to it a common understanding and belief is that the input