Reduction of GST need of hour: Realty sector
The Government’s announcement to create Rs 20,000 crore stress fund for real estate sector has evoked mixed reactions from the real community in the city. The real estate industry in Hyderabad has been on an upswing for the past three to four years and the number of stalled projects is fewer when compared to other cities.
“There will be no big benefit of the new fund to the developers in the city as the unsold inventory is small. While the creation of fund is welcome, the industry here wants support in terms of the taxes paid. For instance, a developer or a builder pays about 35-40 per cent of the total project cost as taxes. This should come down to ensure that the prices stay within in reach of the majority,” said real estate industry body Credai Hyderabad president P Rama Krishna Rao.
Issues relating to GST should have been addressed. “GST for Government contracts is 12 per cent and for corporate contracts it is 18 per cent. From contractors’ point of view, there is no difference in the materials and resources used. However, they end up paying higher GST for private contracts,” he said.
The body has represented the issue to TS Finance Minister to take it up at the next GST Council meeting in Delhi on September 20, he said.
C Shekar Reddy, Past national president at CREDAI and CMD of CSR Estates, said the new stress fund, in which the the Government will infuse Rs 10,000 crore and mop up an equal amount from other sources, will support the growth of real estate industry in many States.
“Now, only non-NPA and non-NCLT projects are eligible for the support. In the next phase, the same support should be extended to projects that are now turns and also to those that are under insolvency,” he said adding that several sectors are not doing well and there is a need to revise the definition of NPAs in line with the current economic situation.
GBK Rao, Chairman Managing Director of Pragathi, said Government should focus on the wellness of the real estate sector and not address just the `sick players’. There is a need for giving carbon credits to developers who are taking up real estate projects that focus on green living.
PostedOn: 15 Sep 2019
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