Leading Developer Hiranandani Urges FM to Revisit GST Rate and Remove Stamp Duty

Surendra Hiranandani has listed a few of the important points that should be taken care by the government in the next budget that can bring positive impact to the real estate industry.

Put an end to Stamp Duty, Revise GST Rate
Currently, the GST rate on the sale of flats is 12% of sales. Before GST, service tax was 4.5% and VAT was 1%. It means it charges 5.5% of total tax on sales. In GST regime, the input tax credit on taxes paid on construction materials which can be rolled out against the liability of GST, the tax rate after adjustment is higher than 5.5%. In addition, stamp duty keeps remaining in force even after GST and rates are subject to vary from one state to another which raises the costs for consumer. State government is hopeful to abolish the same or merge with GST.

The Finance Act 2017 controls the loss from residential property that can be adjusted against other income by Rs. 2 Lakh. The loss beyond that amount should be adjusted and carried forward against rental income in future. With high prices of property, it is not going to be practical. So, it seems that it should be raised to Rs. 3 Lakh so tax payers will be allowed to set off large part of loss of house property over other income. Focus on Affordable Housing

In the near future, affordable housing is going to be a major growth driver with the support and initiatives by the government. Further sops are expected to promote the participation of private sector in this segment. Currently, there are several concerns, such as non-availability of urban land at affordable rates, high taxes and fees, rising construction costs, unfavorable norms of development and regulatory problems that developers face to work on this segment.

Approvals should be easy and simple. Industry is looking forward eagerly for pre- defined schedules for quick approvals to help developers to finish and handover the properties on timely basis. These bottlenecks should be removed if government wants to fulfill its “Housing for All” mission by 2022.