The Goods and Services Act (GST) implemented on July 1, 2017 in India is a singular, consolidated tax system that brought the different central and state tax system under one umbrella thereby, steam lining the tax regime especially for the non-resident Indian (NRI). So far, the impact of the GST on the NRI has been minimal, which is being viewed as a positive so far.
Following pointers reflect some of the ways in which the GST has affected the NRI population:
- As long as the NRI traveler enters India with the amount of baggage subjected to fulfillment conditions, no GST is levied on the traveler.
- In case of jewelry, the NRI traveler can carry up to amounts of Rs. 300,000 after which GST is applied on the additional amounts.
- Any other item exceeding value of Rs. 100,000 and exceeding 50 units in a year, imported as personal baggage will also incur GST.
- However, the silver lining is that the NRI can claim a GST refund for any purchases made on leaving India.
- As for investing in real estate in India, NRIs have an advantage in moving into ready-to-move-in properties since they do not incur any GST.
- However, there is a six percent GST increase on ‘under-construction’ property from 12% to 18%.
- If the NRI decides to buy land and build on his own, he has the advantage of saving one third of the value of the property as it is considered cost of land and gets the GST exemption.
- The overall cost of property has gone down since the developers get a GST credit on purchase of raw material which they pass on to the property buyer. RERA has had another significant impact on the properties the NRIs may purchase in India.
- NRIs may rent their residential property in India and get an exemption from GST.
- Renting out commercial property that receives rent above Rs. 2 million incurs a 18% GST.
- NRIs holding a non-resident ordinary rupee (NRO) or non-resident rupee (NRE) account with any bank in India have to bear a GST of 18% for banking services. This is only a small 3% increase from the original 15%.
- An NRI remitting money to India bears a small increase of 3% for the recipient there which amounts to just a few rupees extra.To find and compare convenient ways to remit money to India, opt for the most suitable vehicle on CompareRemit.
For more information on how the GST was implemented and its implications on Non-resident Indians, stay tuned here for more updates.