Monthly Archives: July 2017

Choose Magicrete for a strong and durable home

Are you constructing a new house? Are you renovating your house? Make sure you use the best products available in the industry to build a strong and reliable house. With the use of latest technology and the innovations in the industry, it is now possible to build a house that is earthquake resistant and allows you to enjoy the weather without any stress. Indian construction industry uses innovative technology that allows you to maximize the efficiency and ensure that the products used are cost efficient as well.

You can now replace the traditional clay bricks with AAC (Autoclaved Aerated Concrete) blocks brought to you by Magicrete. The AAC blocks are high in strength, light in weight and cost efficient. The blocks are an ideal replacement for the heavy bricks which required a lot of effort in terms of transportation. There are various benefits of using AAC blocks for your construction; these blocks are versatile with properties of earthquake resistance, thermal conductivity and ease of use. AAC blocks are used across many countries in the World; they have only started to make a mark in India and across the Indian construction industry. Magicrete offers a range of products that are technology driven and also offers value added services to all the clients. It is the first AAC Company to have provided complete walling solutions with a range of products that are high in quality and highly durable. Magicrete has a technology driven model which ensures timely dispatch, quality check and provides value added services.

It has successfully served more than 2000 projects with esteemed clients that include Reliance Industries Limited, Larsen and Toubro Limited, TATA Housing, DLF Building and many more. The clients are highly satisfied with the products offered by Magicrete and are moving towards the adoption of new technology. AAC blocks are environment friendly and do not pollute air, water or land. This ensures that there is no generation of waste during the construction process. Another primary consideration of the blocks is moisture protection. The AAC blocks have porous structure, which are small air bubbles distributed evenly throughout the material. This ensures that there is minimal absorption of water into the AAC blocks and gives complete protection internally as well as externally.

Magicrete aims to introduce the latest technology and replace traditional clay bricks with AAC Blocks. It is a pioneer in the manufacture and sales of the AAC blocks which are making news across different cities. They aim to provide complete information about the use and benefits of the same, so that the client knows that they are investing in the best for their homes. If you have a property under construction or are planning to build a house, do take a look at the products offered by Magicrete and choose nothing but the best for yourself. The long lasting and versatile AAC blocks are here to stay and make a mark in the construction industry across the nation.

Use water resistant AAC blocks and enjoy rain

  magicrete

Every house is constructed with the best care and materials, although, sometimes this could go wrong and leave you worrying on a rainy day. Come monsoon and the trouble of water seepage begins. This could lead to a major damage in the walls of your home and destroy the beauty of it. In the long term, it could become difficult to cover the damage done by water seepage into your walls. Although monsoon is the most awaited period in the year, it brings a lot of trouble if the structure of the house is not checked in advance. If you go through the same trouble year after year, we advise you to use water resistant AAC blocks and enjoy the rain without any stress.

AAC blocks are light in weight and made from lime, sand, cement and water. They are easy to work around with and much lighter than bricks, which makes your building lighter by reducing the amount of steel and concrete. They also do not consume a large amount of electricity and are easy to transport. One of the biggest advantages of AAC blocks is that water does not penetrate through the blocks. Microscopic structure of AAC block does not allow for capillary action, making it impervious to water. Its water barrier properties are further enhanced by adding silicone based additives. In contrast, water does penetrate through the red clay brick which could cause trouble to your building in the long term.

AAC blocks are a developing product across many Countries, the environment friendly construction material results in the strong thermal insulation of the walls. It is resistant to earthquakes and are manufactured using European innovation. The blocks are highly recommended for use in high rise buildings due to the light weight and the ease of transportation. These blocks are designed with special care that ensure no seepage of water or damage to the walls. If you have had difficulties in the months of monsoon, it is highly recommended that you use the AAC blocks for the construction of your home or office. Using the right materials will not only ensure longevity, but also ensure that you face no troubles in any weather. AAC blocks can be used in all types of structures- residential buildings, commercial complexes, offices, hospitals and hotels, educational institutes, industrial buildings and infrastructures.

The blocks are fire resistant and have a porous structure, which makes it ideal for your use. It consists of macro pores that are evenly distributed throughout the material, this is the reason that the absorption of water in the material is minimal. In the case of an earthquake, the blocks will provide complete safety to the entire building. AAC blocks are considered ideal for the construction of high rise buildings, they provide complete safety and security from any form of damage. If you are building a house or refurbishing your house, make sure that you use AAC blocks and remain stress free during the months of monsoon.

Enjoy the rainy season without any worries!

Impact of GST on Construction Materials and Services

Effective as on 1st July 2017, all sectors have to pay Goods and Service Tax (GST) in India. The proposed GST is expected to do wonders by reducing the overlapping tax burden in India. In the previous article, insight on the effect of GST on real estate sector was discussed. This article throws light on the GST rate for constructing materials including sand, AAC blocks, bricks, cement, wires, paints, iron, steel and other materials.

 

 

Bifurcation of Construction Materials GST Rate

 

Find the table below with GST rates based on the percentage.

 

5% 12% 18% 28% 12-18% 18-28%
River Sand AAC Blocks Steel Cement Marble and Granite Tiles
Crush Sand Fly Ash Bricks Cement Block Glass CP Fittings
Aggregate GI Fittings Wire and Cable Aluminium Windows
Stone Key Locks Paint and Varnish
Red Bricks Sanitary Fittings
Shahabad Wallpapers
Wooden Door and Window

 

The GST for building materials ranges between 5% and 28%. The Harmonized System Nomenclature (HSN) code decides the GST for various materials. Source

 

Comparison with Contractor Service Fees and Building Material Price – Before and After GST

 

Before GST, the indirect tax regime, contractor service charge covers three types of taxable actions:

  1. Goods supply
  2. Services
  3. Manufacturing

 

Goods supply falls under VAT; Services comes under the service tax. Central excise duty charges for manufacturing new products during the construction work.

 

According to Mr. Sanjay Garg, KPMG partner (indirect tax), the implementation of GST in India provides the long awaited generalization of the indirect tax structure. Contractor works (Work Contracts) is considered only as a service. The cost of raw materials procured will come down due to the Input Tax Credit (ITC) facility.

 

The cash constituent of the building construction economy will reduce due to the execution of GST in India. To avail ITC, contractors must purchase raw materials from GST-registered vendors, resulting in better tax compliance.

 

For Instance: Few supplies including steel will be at the lower end in cost as per the GST regime. Coal, the raw material required to make steel falls under 5% GST. Before the GST implementation, the percentage was as high as 11.5%. Source

 

If the contractor provides only services, will there be a tax on service fees?

 

This clearly states that the works contract with effect to the GST regime comes under service. The tax would be levied accordingly, and not as supplies, partial supplies, and partial services.

 

GST has considered the works contract as a service. No longer will any confusion arise of the supply of goods.

 

Before GST, different states followed different methods for VAT. The complex Service tax was 60% abatement on new works and 30% reduction on repair contracts.

 

GST offers a great relief and solves those confusions with a simple calculation. GST has not described reduction and composition.

 

Under GST, the work contract is considered as a service, and hence, the composition scheme is not available. Contractor’s compliances and costs will increase as they will follow the standard taxation system. Source

 

GST confirmation on works contract as a service has brought clarity. But the lack of details in the areas of input tax credit (ITC) and composition schemes will lead to disputes.

 

Magicrete Building Solutions, based in Surat, is a leading manufacturer, and supplier of AAC blocks. Being a pioneer in green building materials, with two manufacturing units in Gujarat and Haryana, it has crossed a turnover of Rupees 5 billion. A trusted partner in the construction industry since 2008, it is all set to face the GST and still make raw materials affordable to its clients.

GST Effect on House Construction

GST Effect on House Construction

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Building one’s own home is almost every individual’s dream and it requires both planning as well as courage. While, deciding upon getting a home loan is the most crucial step, understanding how it works or will work in the coming months is even more important. If you are building a home with an alluring image in mind, the first thing that anyone asks is, ‘Will GST affect home construction?’. So, will it affect home construction and real estate sector in general?

 

The GST Council has moved the real estate sector under the GST boundaries, only partially that too via works contracts. So that means, in a simple statement, that these will be at 12 percent slab with GST in action. With that in mind, it is worth mentioning that a homebuyer has to pay various indirect taxes, including excise duty, VAT, and service tax, which sums up to a tax of about 11 percent, excluding stamp duty. (Taxes have been fetched from Source 1 & Source 2)

 

Who pays what, and how much?

  • Under-construction real estate properties will be tabulated as the supply of services and hence will be liable to pay GST.
  • Sale of land and completed real estate properties are exempted from GST.
  • As per ICRA note, GST for real estate can be either 18 percent or 12 percent.
  • If the construction of buildings predetermined for sale to a buyer includes land in the sale value, the payable GST will be 12 percent.
  • If the land and construction values are defined through separate agreements, the payable GST will be 18 percent.

 

What gets consumed, what remains intact?

  • VAT (value added tax) and service tax that is currently a part of costs of under-construction properties, will be subsumed by GST.
  • No change will be seen in the stamp duty and registration charges for land, completed properties, and under construction properties. GST is not expected to subsume stamp duty and registration charges.

 

According to Mr. Jain, ICRA, the GST rates are higher than the current tax modules and tax rates for the individual buyer, in most of the states, but the seemingly higher GST rates should get balanced out if the developers pass on the perk of higher ITC (Input Tax Credit) available to them. In simple words, the developers are expected to pass the amount they earn as tax (ITC), in order to reduce the overall impact of high GST rates. He also added that, at the moment, a few indirect taxes paid by the developer, like CST on materials used for construction and excise duty aren’t taken into view as input. With GST in picture, the taxes at each level will be lowered as compared to proposed GST rates, which is expected to lower the total project cost in the near future.

 

Real estate has always been that one sector, where price control always seems out of hand. Many dreams of building a home get shattered with this unexpectedly high cost of the home construction, and yet developers keep complaining about their own problems in managing all this. This also results into late home constructions, in fact very very late. GST in real estate is a ray of hope in the direction of affordable housing scheme by the government, and it is expected to benefit both the buyer as well as the developer. The developer will have to invest less (with reduced levels of taxes), and hence buyer will pay less (due to less taxes being paid by the developer).