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NAREDCO writes to PM; seeks 6% GST, exemption to low-cost home
Realtors` body NAREDCO has written to the Prime Minister seeking lower GST of 6 percent on sale of under-construction property from 12 percent as higher tax will lead to price rise and affect sales.
New Delhi: Realtors' body NAREDCO has written to the Prime Minister seeking lower GST of 6 percent on sale of under-construction property from 12 percent as higher tax will lead to price rise and affect sales.
It has also sought exemption of Good and Services Tax (GST), to be rolled out from July 1, on affordable housing which has gained momentum after getting infrastructure status and interest subsidy.
"The GST regime proposes to tax sale of under construction real estate property at 12 per cent on the total sale value (including the land value). This is in addition to the stamp duty levied around 5-6 per cent on the sale value.
"The total tax burden of around 18 per cent on the sale of under-construction real estate property will lead to inflationary impact on the cost of property," NAREDCO said in a letter to Prime Minister Narendra Modi dated June 17.
The copy of this letter has also been given to Finance Minister Arun Jaitley and Revenue Secretary Hasmukh Adhia.
NAREDCO has suggested that the government should allow deduction for land in the GST law or the GST rate for sale of under construction real estate should be fixed at 6 per cent on the agreement value to make it comparable to the present situation.
The association has welcomed the GST regime, which aims to boost country?s growth exponentially.
"The objective of GST is to ensure that all businesses engaged in making products or providing services become accountable. However, there are still some unresolved issues emanating from the GST law for the sector as a whole, which need the immediate attention of your office," it said in the letter to PM.
NAREDCO has also sought extension of proposed exemption on taxability of long term leases to other than industrial plots. It wants that granting of development rights to be treated similar to sale of land;
The association has sought allowance of input tax credit of construction of property for renting/leasing purposes, besides clarity on taxability of PLC, parking charges.