Journal Press India®

Input Tax Credit and its Impact on Real Estate Prices

Vol 7 , Issue 2 , July - December 2020 | Pages: 69-82 | Research Paper  

 
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https://doi.org/10.17492/jpi.vision.v7i2.722040


Author Details ( * ) denotes Corresponding author

1. * Abhisek Singhvi, Student, Law, Nalsar University of Law Hyderabad, Guwahati, Assam, India (abhi731995@nalsar.ac.in)
2. Prabhakar Narwane, Student, Law, Nalsar University of Law Hyderabad, Pune, Maharashtra, India (prabhakar2narwane@gmail.com)

Real estate has been a contentious issues when it comes to indirect taxation. Under GST, it has faced various issues related to rates, input tax credits, and the value of supply. Various representations have been made to the Government for simplification and reduction of rates. The government has also been revisiting and reviewing the tax regime when it comes to real estate sector. One such issue was very high tax rate on the end-user i.e. consumers of real estate projects. The government was also of the opinion of reducing the tax rate in this segmentas it would provide a boost to the residential segment. Accordingly, lower rates were introduced through various government notifications. This paper deals with the issue of credit of input tax which the supplier under the post-notification phase is not allowed to claim and explains how it could backfire and thereby affect the end recipients again i.e. consumers in a negative way.

Keywords

Input tax credit; Residential real estate segment; Destination principle; Value added principle; Input tax ineligibility.

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