The Forum for People’s Collective Efforts (FPCE), a national body to safeguard homebuyers’ interests, has written to Union Finance Minister Arun Jaitley, seeking changes in income-tax laws and stricter implementation of anti-profiteering measures against developers who are not passing on GST benefits.

According to Abhay Upadhyay, president of the group and a member of the Central Advisory Council of RERA, a section of developers have not passed on the input tax credit benefits to homebuyers.

“It may have already come to your notice that builders, though charging 12 per cent GST from buyers, are not passing on the benefit of input tax credit. This has led to an added burden on buyers of the ongoing projects,” the letter said.

Stern action sought

Accordingly, FPCE has suggested that the Anti-Profiteering Authority take “stern action” against the builders and builder associations should be warned against such practices. A complaint mechanism should also be put in place to address grievances of home buyers.

The forum has also urged the Minister to bring the entire real estate sector under the ambit of GST by bringing stamp duty and other registration charges under the new tax regime. Currently, completed projects are exempt from GST.

Amending other laws

The forum has also requested for an amendment to Section 24(b) of the Income Tax Act under which homebuyers do not get relief of interest on home loans in case the property is taken possession of five years after taking loan.

“This limitation clause is punishing honest homebuyers for no fault of theirs as delay in getting possession is solely due to the fault of builders and home buyers have no role to play,” the letter said.

Amongst the other recommendations, FPCE has also suggested changes in the Insolvency and Bankruptcy Code 2016 to make homebuyers “primary secured creditors” and not unsecured ones. This will safeguard homebuyers’ investments in a project, it said.

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