India marked the ninth anniversary of the Goods and Services Tax (GST) on Wednesday, with real estate industry leaders crediting the indirect tax regime for making the sector more transparent, compliant and organised. While acknowledging the gains since its rollout in 2017, they said the next phase of reforms should focus on reducing construction costs and improving long-term policy stability under “GST 2.0.”
Introduced on July 1, 2017, GST replaced multiple indirect taxes with a unified tax structure. Affordable housing currently attracts 1 per cent GST, while under-construction residential properties are taxed at 5 per cent without Input Tax Credit (ITC). Completed homes remain outside the GST ambit, although stamp duty and registration charges continue to apply.
Sandeep Agarwal, Executive Director - Finance & Group CFO, Elan Group, said the expanding GST ecosystem reflects a broader tax base and stronger compliance, indicating that businesses are operating in a more "transparent and organised" manner.
According to Agarwal, the unified tax framework has improved business predictability for developers, strengthened confidence across the construction value chain and is expected to support positive buyer sentiment, particularly in the premium housing segment.
Transparency Drives Formalisation
Highlighting better financial discipline, Sam Chopra, President and CEO, eXp Realty India, said GST's contribution extends beyond taxation by accelerating the formalisation of India's real estate sector.
Chopra noted that a "transparent and structured tax regime" has encouraged better documentation, improved compliance and greater financial discipline across the value chain. Tax clarity, he said, will continue to strengthen buyer confidence and attract long-term domestic and global investments.
Emphasising stronger compliance, Rajat Bokolia, CEO, Newstone, said the widening GST base reflects a more organised real estate industry, enabling developers to plan projects with greater certainty. Bokolia added that stronger compliance has reinforced confidence across the construction ecosystem, while improving economic activity is expected to keep investor and homebuyer sentiment positive.
Industry Pushes For Reforms
Calling for policy rationalisation, Ashish Narain Agarwal, Founder and Managing Director, PropertyPistol, described GST as a "defining reform" that has brought greater transparency, predictability and accountability to property transactions.
Agarwal stressed that the focus should now shift towards rationalising GST on "key construction materials" such as cement and steel, where the higher tax incidence continues to raise project costs and affect housing affordability.
Backing further structural reforms, Vishal Raheja, Founder and Managing Director, InvestoXpert Advisors, said GST has laid the foundation for a more formal and technology-driven economy, supported by a significant increase in taxpayer registrations and collections.
Raheja maintained that revisiting GST on construction materials and "Input Tax Credit (ITC)" provisions would improve capital efficiency, reduce project costs, encourage formal investments and strengthen real estate's contribution to economic growth.
Next Phase Of Reforms
Pointing to operational efficiencies, Shorab Upadhyay, Managing Director, TRG Group, said GST has simplified multiple indirect taxes, improved supply chain efficiency and strengthened accountability across the construction process.
Upadhyay observed that the consolidated tax structure has reduced operational complexity, enhanced compliance and increased confidence among institutional investors and customers. Future reforms under "GST 2.0" could further simplify business processes.
Looking ahead to "GST 2.0," Abhishek Raj, Founder and CEO, Jenika Ventures, said the next phase of GST reforms is expected to simplify taxation further and improve ease of doing business for investors and businesses alike. A stable tax regime, in his view, will be critical for enabling investment decisions, strengthening transparency and attracting institutional capital as India's rapid urbanisation continues.
While acknowledging GST's role in formalising the real estate sector, industry leaders said the next phase of reforms should focus on rationalising taxes on construction materials and ensuring greater policy certainty. They said these measures would help improve affordability, enhance project viability and support sustained growth. |
