How will GST Impact the Indian Real Estate Sector

Impact of The Goods & Service Tax - GST 

The most ground-breaking tax connected reforms in some decades to be seen in India is the Goods and Service Tax – GST that will eradicate the incompatible as well as mounting taxation arrangements which have confused various industries over the last few decades.

 It would positively tend to have a deep effect on the economic prospects of India. An individual indirect tax covering the goods and services would tend to increased tax collection in the long run by making it simple for retailers together with many other businesses in complying as well as regulating the overall taxation stages. The favourable outcome of this new taxation administration would only become apparent within 2-3 years after its implementation.

 In spite of the announcement of the tax structure of the goods and services tax – GST, a lot of speculation would be there with regards to tax rate being applicable to the real estate as well as construction industry. It would be untimely to comment at this point of time since the tax rate has not yet been decided. Prospects for the real estate would be in the bracket of 12% but the GST rate does not seem to be the only significant element.

GST – Tax Neutral/Tad Adverse

It is a known fact that real estate sector tends to play a vital part in employment generation in India and ranks second after agriculture. The significance of real estate segment is comprehended with its average 5-6% GDP contribution as well as stimulating demand for over 250 subsidiary industries.

The real estate segment is said to have a considerable growth of about 22% in its private equity reserves from 2015 to 2016. During the third quarter of 2016, there was an increase of 9% in investments for residential properties from previous quarter.

The reduction rules for developers applicable under service tax system together with the input tax credit facility would be determined if the effective tax incidence on real estate would be lower or higher under GST. Meritoriously the composition system enables reduction against the cost of land up to 75% of the cost of the house for residential units at a price under I crores IND and less than 2000 sq.ft. tends to make the effective rate at 3,75%.The reduction in other cases seems to go below 70% thus making the effective rate at 4% which will go a long way in defining whether GST would be tax neutral or tax adverse in the case of real estate.

Uncertainties to Rental Housing Market

Some clarity on reduction for under construction houses as well as input tax credit benefit for developers has been offered by the government. Considering the residential property sector, the sales have not only been obstructed by tax rates but also by sentiment as well as on account of the trust deficit that the Real Estate Regulation & Development Act or RERA, it now seeks to report. Under GST, if cost tends to go higher, the lower prevailing current home loan rates to some extent could ease the impact.

Investors and buyers together with the developers are reasonably anxious that the final ticket size of the homes would escalate if the Government levies GST at 12% as against the prevailing service tax rates. Further clarity on this is anticipated by the developers though they are aware that it is in the interest of their business in keeping ticket sizes range-bound.

Developing market dynamics have already made a change in a way the developers tend to work. Other uncertainties relate to the rental housing market that would logically be the obstructed if the Government tend to tax residential leases under GST.

Rental Profit/Capital Value Appreciation

The common anxiety is that should this occur, the rental housing segment would see a big slump over the medium-term as residential leases are not taxed at all presently. It is appropriate to note that the residential leasing could be an essential demand that would not disappear just by increased taxes.

 Undoubtedly, we could be viewing at rental lack of progress or marginal decline while the market readapts to the new dynamics that GST would permeate. Rental housing demand however tends to be sticky and end-user-driven in nature. Hence we are certainly not watching for major slump in this sector due to GST even if it does not tend to tax residential leases.

Nonetheless it is true that most of the investors in the residential segment do not tend to invest for rental profit but for capital value appreciation and so reduced rental profits would not freely control sentiment. With regards to the impact of GST on the commercial office real estate market, with the prevailing service tax for commercial leases at 15%, GST overall would be probably neutral.

Presently reasonably priced housing has been exempted from service tax and it is possible that the government would come out with a clarification with regards to the applicability or tend to continue the exemption under the GST.

How Can I Enhance My Company's Conversion Rates?

One of the business owner's primary concerns is determining how to optimize the company's conversion rates. If you're currently thinking about strategies you can implement to enhance your organization's bottom line, it's important to remember that there are hundreds of options available to you. Here are three of them:

1. Utilize Consulting Services.

One of the best ways to improve your company's conversion rates is by utilizing business consulting services. These services will ensure that you have a team of business experts carefully analyzing every element of your company to ensure that it is functioning optimally. Any errors detected will be corrected so that your organization can maximize efficiency. Once this happens, you can expect to see a substantive increase in your conversion rates. Companies such as Predictive Service are pleased to offer clients dynamic reliability consulting services to keep their organizations going and growing.

2. Invest In Digital Marketing Services.

In addition to utilizing consulting services, make sure that you start investing in digital marketing services. This step is immensely important because we now live in a digital world. Given that people are now using mobile devices and PCs to shop and purchase items online, you want to be able to connect and convert people through the internet sphere. Some of the digital advertising services that may prove particularly beneficial for your organization include:

• web design and development

• social media optimization

• online reputation management

• search engine optimization

• blog work

Another digital advertising service that can be particularly beneficial for your organization is content marketing. This service is empowering because it ensures that all of your online content is innovative, information-rich, and engaging. Some forms of online content that you'll want to optimize include blog posts, web articles, and videos.

3. Implement Customer Relationship Management (CRM) Software.

One final conversion rate optimization technique that you may want to implement is the use of CRM software. This software helps your sales and marketing staff optimize interactions with customers, thereby increasing the likelihood that they will make purchases and be loyal to your brand. For example, CRM software enables your employees to keep detailed records of each conversation they have with clients as well as the purchases made by the customer. This information will help them market new products more effectively!

Don't Delay: Start Optimizing Conversion Today!

There are millions of things you can do to increase your company's bottom line. Three conversion optimization strategies you may want to consider implementing include utilizing consulting services, investing in digital marketing services, and implementing CRM software!

GST not to increase compliance burden, says Hasmukh Adhia

GST Not to Increase Compliance Load

Hasmukj Adhia, Revenue Secretary has informed that the GST would not increase compliance load on assessees, regarding the same are misdirected. He had stated while addressing netizens on Facebook that several people are of the opinion that the implementation of GST would end in increase in compliance cost which is totally misplaced.

 While explaining the basis he had said that people need tto keep various law books for the purpose of filing return for different taxes such as VAT, Excise etc in the prevailing taxation system. He went on to added that with the roll out of GST, there would be individual tax as well as accounting for which it would be quite easy.

It could be done via an offline excel form provided by the GST Network and if one intends to utilise this form for the purpose of maintaining record on the purchase and sales, he could utilise this for filing return and hence compliance would be reduced. Adhia leading the implementation of the Goods and Services Tax – GST had mentioned that the finance ministry has been gearing up for its roll out and a training comprising of five days has been already given to the officers.

GST to Be Implemented in July

He has also informed that an IT training is in the process for them. The intention of the government is to implement the GST from July 1 and the GST Council controlled by Finance Minister, Arun Jaitley had settled four rate classifications of 5%, 12%, 18% and 28% on merging levies such as central excise, service tax and VAT.

 Addition would be done by calculating the overall incidence of present taxation - central plus state levies and thereafter placing the good or service in the tax bracket nearest to it. Adhia also informed that the indirect tax load would come down in the new GST system. He said that there would be several goods and service that would be out of GST and would therefore offer advantage to common man with regards to taxes and the roll out GST would be tax neutral or there could be decrease of tax burden.

Regarding traders, he also informed that the tax filing would begin from the starting point level of Rs 20 lakh where the registration below the inception limit would not be essential.

No Harmonized System of Nomenclature 

He also informed that under PAN within one state only one registration would be permitted. For one business, no other registration would be permitted though there would be a need of single registration with regards to supply of production for more than one state.

For the purpose of coding, he mentioned that no Harmonized System of Nomenclature – HSN code would be needed in case of business turnover of Rs 1.5 crore. The Revenue Secretary also mentioned that on petroleum as well as alcohol products under GST, would not be under the new tax system till the time the GST Council tends to impose a rate. He added that in the near future, if the state agrees then petrol, alcohol together with natural gas would be coming under GST.

The Benefits of a 360 Degree Employee Survey

Let's face it, you don't always like getting feedback about your job performance. Even when you know it's coming, it can be hard to face the truth from your fellow employees. Add the process of taking a survey and it becomes even less appealing. You would think that great leaders are the best people at getting feedback, but this is definitely not the case.

Think about who gets told the most what they are doing wrong at your company. If it's anything like most other businesses, the higher you go up the totem pole, the less feedback you are going to get. Thanks to all of this, a 360 degree employee survey can be a huge benefit to your company. Here are just a few of the reasons why.

1.  Puts how over what - Just because an employee is getting all of their work on time doesn't necessarily make them a great employee. They need to be doing it in a way that benefits both them and the company without cutting corners or taking the easy way out. One thing this type of survey does is ensure that each employee is following protocol correctly in their daily tasks because an organized company is a healthy company. 



2.  Accountability - Everyone at a company should be held accountable for their job in the same way. Just because you have been promoted and advanced to a higher level in the company doesn't mean that you aren't held to the same high standard that you were when you were new.
    



3.   Performance Enhancing - One great thing that a survey does is remind people of what the job requires, especially helpful for long-time employees at the business that may have grown stagnant and bored with their job. The survey can act as a refresher course that inspires them and makes them perform better in the future.
   
    
4.  Improves Intra-office Relationships - Employees that are open and honest with each other build trust and the best way to do this is through an open dialogue.
    

These are just some the reasons that a 360 employee survey can be beneficial to both a company's leadership and lower-level personnel. Those looking into having a survey done at their place of business should contact a professional consulting group like Key Group Consulting. They have the knowledge and facilities to complete a survey for a company of any size.

How Fintech Is Increasing Financial Inclusion after Demonetisation

Prospect of Personal Finance – Cashless/Paperless/Presence-less

Prospect of personal finance and money is being fashioned into three consequences namely cashless, paperless and presence-less. Due to demonetisation together with succeeding steps involved ever since attempts have been done by the Indian government in making the economy more digitized and less cash-dependent and the banking system is made more accessible.

 Being digital seems to be the quickest means of speeding up financial presence, ensuring that more individuals are brought under the domain of formal banking scheme, Moreover they can also take advantage from the linked benefits of insurance as well as investment. India has been a home to almost 50 crore million people who do not seem to involve themselves in formal banking either through saving account or a cell phone based payment scheme.
Digital execution means having a bank account and hence the challenge here is how you could get more individuals in opening bank accounts to provide them with digital benefits together with subsidies. When the government had been directing the country towards a reduction in the use of hard cash, people would need to have an account with the bank, together with internet connection as well as cell phone to operate the digital transaction. It is here that the roles of Aadhaar as well as the cell phone tend to get crucial.

Pilot Project through RBI

From the population of about 125 crore, around 109 crore have enrolled for Aadhar with at least 100 crore having cell phone number which is quite a large number than those having bank accounts which according to estimates would be around 70 crore.

With the combination of Aadhar together with cell phone it is advantageous of bridging the gap by around 30 crore unbanked individuals.The government has aided a pilot project, through the RBI which would quicken the opening of fresh bank accounts with the support of cell phones and Aadhaar.

Limited- functionality bank accounts can be opened by the customers utilising this system without the need of the usual stress of visiting a branch and submission of documents in completing the KYC process. With the aid of the Aadhaar linked cell number, their KYC can be completed by authenticating themselves via an OTP and one can open an account digitally, instantly, cashless, paperless, without the need of being physically present.

Process – Convenient & Easy 

This tends to be convenient and easy for the individual to complete the process in the comfort of his home and it is also great for financial service providers since the cost of customer acquisition tends to get condensed by relying on digital platform which have the capabilities of processing millions of account opening application simultaneously.

This will progressively be the type of account opening developments in insurance as well as investment sectors. Insurance providers have already been depending on the OTP system in authenticating new accounts through Aadhaar.

This development would be enhancing with the increase in internet penetration together with the availability of cheap smart phones. India has about 35 crore people, presently who are linked to the internet which tends to double every two to three years on an average and it is expected that by 2020, there would be around 70 crore Indians utilising the internet.