Comments
Benga
Real estate sector wants clarity on GST rate for joint development agreement (JDA) or sale of development rights, especially for commercial projects in the Budget 2019-20 .
“Equally important is to clear the confusion on GST rate for joint development agreement (JDA) or sale of development rights, especially for commercial projects,” said J C Sharma, Vice Chairman and Managing Director, SOBHA Limited.
“While a specific exemption has been granted for transfer of development rights in a residential JDA, commercial developments have not been given exemption,” he added.
This increases the taxes for commercial projects with GST being levied on any express or implied transfer of development rights vis-à-vis residential development.
“Hence, we hope that Union Government will address this issue and consider not to include transactions relating to development rights under GST. Instead, such transaction should be brought under the purview of immovable property,” he explained.
“Additionally, in case of transfer of development rights under joint development agreements, GST levied on transfer of development rights by the landowner to developer makes it an indirect tax and should not fall under GST. Therefore, this requires reconsideration of the Government,” he added.
Fillip to housing market
In the Budget, we hope that the government will continue to address the concerns of the real estate sector and give much needed fillip to the housing market.
Bijay Agarwal, Managing Director, Salarpuria Sattva Group, said “In order to achieve the objective of providing ‘Housing for All’ by 2022, the Union government needs to look into the requirements of home loan borrowers. Further, to address the issue of affordability, stamp duty should be subsumed in the GST.”
“One area that requires immediate attention is to increase the threshold value of affordable housing under the Pradhan Mantri Awas Yojana (PMAY) scheme from the current Rs 45 lakh to Rs 75 lakh. In markets such as Bengaluru, the lands prices are high, making it unrealistic for the developers to offer homes at a price point of Rs 45 lakh,” pointed out Sharma.
“Additionally, as per the data available, approximately 85 per cent of housing units fall within the Rs 45 lakh to Rs 75 lakh bracket. Similarly, we recommend that the carpet area threshold for affordable housing is increased from the current 60 square metre to 90 square metre (sq.m.) in metros and from 90 (sq.m.) to 120 (sq.m.) in non-metro cities, in line with the consumption trends. By redefining the threshold value and area of homes under affordable housing, the Government can bring more number of projects under the purview of ‘affordable housing’. This will enable a wider segment of the market to avail the income tax benefits,” he said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.