Buying a property under the GST regime would most certainly become cheaper & simpler.
What makes us say so? Well simple because as a home buyer, you now wouldn’t have to find rates of so many different taxes — like service tax, excise duty, VAT (value-added tax), entry tax, customs duty, etc. When compared to 18 per cent GST rate, real estate transactions involved tax payments of up to 25 per cent, owing to the existence of a multitude of levies. Because of input tax credit facility, developers will only be paying 12 per cent GST that would further lessen the tax amount.
However, the same cannot be said about setting up your new home. In case you have already bought a house and are planning to shift soon, there are many ways in which GST would raise your expenses.
- Maintenance charges to go up
Let’s start with maintenance charges. Before July 1, an apartment owner paid 15.55 per cent as tax on maintenance charges. Under GST, this owner would be taxed at an 18 per cent rate, a difference of 2.5 per cent.
Take note that maintenance charges do not include utility bills such as electricity and water charges or property tax and stamp duty.
2. Pay more for decking up your home
If you are planning to hire the services of an interior decorator to beautify your house, you will be paying an additional three percent tax under GST. One paid a service tax of 15 per cent on interior decorator services earlier. Under GST, the rate is kept at 18 per cent.
However, rates for carpets and LED lights have been reduced substantially. For LED lights and lamps, the tax would be reduced from the existing 17.5 per cent to 12 per cent. For carpets, the same rate would be applicable, a substantial reduction from the earlier 25 per cent.
3. Pay more for TV, AC
In case you have to buy a new television, a new refrigerator, a new microwave, a dishwasher and a new washing machine for your new home, you may have to pay double the price that you paid before July 1, the day on which the GST regime came into effect. Manufacturers of these items will have to pay effective four per cent more in taxes now.
4.The additional burden on your kitchen
This is for you, the woman of the house. You will be paying more to have an ample supply of your favourite beverages, tea, coffee and aerated beverages. The rates varied between three and nine per cent earlier. Aerated beverages would be taxed at 28 per cent under GST.
5. Pay more to stay connected
Wait, you will also be paying more for enjoying uninterrupted DTH services, internet and Wi-Fi connectivity. Because the new tax regime would need you to be more tech savvy than ever, you will have to ensure you do have an internet or a Wi-Fi connection.
6. Ready to transact? Pay more for that too
To buy your household items or to avail of the services, you will be using plastic money. This, too, is going to cost you more now. For all your banking needs, you will be paying a higher amount to avail of the services. This includes ATM withdrawals, too. In case you are more of an online shopper, be ready to pay extra. Till July 1, e-tailers did not pay any tax to the government. Now, they will be paying a standard tax of one per cent. This may translate into a higher outgo for the shopper.
