With India set to roll out the Goods and Services Tax (GST) on the midnight of June 30, 2017, home buyers are confused about its effect on the real estate sector, especially on property prices.

"It's a complex exercise to quantify the tax cost of projects because every project has different components as goods and different sourcing patterns," said KPMG Partner (Indirect Taxes) Priyajit Ghosh while speaking at a webinar orgainsed by Magicbricks on 'GST and Key Real Estate Issues'. He added that if a developer buys goods from other states then the tax incidence would be different from if the sourcing was done intra-state. 

Lists the key takeaways from the event:

1) Plots and ready-to-move-in properties that have received completion certificate will not attract GST.

2) If a buyer is compensated by a developer on account of delayed delivery or any other reason, the developer will have to pay GST on behalf of the buyer basis reverse charge mechanism because a buyer is an unregistered entity.

3) Interest/penalty on account of delay by a developer will be taxed.

4) There is an ambiguity if the cancellation of sold units and development rights on the sale of plots will attract 12 per cent or 18 per cent GST. There's also a lack of clarity on whether a unit will be taxed on its sale price or break-up price, such as preferential location charges, parking, sewage treatment plant or water treatment plant. 

5) Even if a project is 80 or 90 per cent complete, it will still attract GST. Any pending transaction on a project will attract GST.

6) Water bill will attract GST at concessional rate while power bill will not attract any levy.

7) To claim the input tax credit, a submission has to be made within 180 days.

8) While cement will attract a levy of 28 per cent, steel, services and contract works will attract a tax of 18 per cent.

9) Revision in prices or allotted area will attract GST. "In my opinion, prices of new properties post-GST will be marginally lower or remain the same,"