GST cut on under-construction properties to impact developers' margins

Some experts believe that it will be an uphill task for the developers to hike prices as the demand has not been too forthcoming

The cut in goods and services tax (GST) rates for under-construction properties from 12 per cent to 5 per cent and on affordable housing segment from 8 per cent to one per cent though will aid sales, experts suggest the lack of input tax credit (ITC) availability to the developers is likely to impact their margins going ahead.

Post the GST implementation, developers have been claiming ITC on payments to vendors while collecting the 12 per cent GST from customers in under-construction projects. No ITC will impact projects with high input credit (low land cost) resulting in lower