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In their pre-Budget memorandum, the real estate sector has said that stamp duty should be subsumed in the Goods and Services Tax and the government should come out with measures to ease the liquidity condition.Removal of the Rs 40 lakh price cap for affordable housing, introduced in the interim budget in February, is also in their wish list.Summing up the situation in the realty sector, Parth Mehta, MD, Paradigm Realty pointed out key concerns: "There are four factors increasing input cost due to abolishment of ITC and exorbitant development premiums, excruciating liquidity crisis due to NBFC defaults and rising NPAs of banks, and piling up of unsold inventory due to weak consumer sentiment on back of high unemployment."He said choking of liquidity is taking a toll on the health of companies and further inflicting financial damage."Quick corrective steps should be undertaken by apex bodies and government to pump in enough liquidity into the system," said Niranjan Hiranandani, President of the National Real Estate Development Council (NAREDCO) on Wednesday.He said expectation from the Budget is in the form of rationalisation of taxes by subsuming stamp duty in the GST, extending Input Tax Credit to the commercial segment, reducing corporate tax, abolishing MAT to provide thrust to SEZ developments."Another most imperative expectation is to frame National Rental Housing Policy," said Hiranandani.Realty players also want the Input Tax Credit (ITC) to be re-introduced in the under-construction segmentas as its removal has eaten into their profit margins.In February 2019, the GST Council lowered tax on the under-construction properties to 5 per cent from 18 per cent, and affordable housing projects to 1 per cent from 8 per cent, with effect from April 1. The rate cut, in effect, did away with the ITC or refund given to builders on taxes paid on inputs.Subsuming of stamp duty in GST is another major demand of developers. "It is important that government includes stamp duty in the GST purview to boost the demand for housing, thus enabling absorption of high unsold inventory across metros," Mehta said.On the price cap for the affordable segment, sector players say the price limit of Rs 45 lakh for classification under affordable housing does not fit in cities like Delhi and Mumbai where the land cost is very high. They want relaxation from the government in the definition of affordable housing.A few months back, the GST Council decided that homes priced up to Rs 45 lakh and with a carpet area of up to 60 square metres in metros and 90 square metres in non-metro cities will be counted in the affordable segment.Earlier the definition of affordable housing consisted only of the carpet area limit of 60 square metres and 90 square metres.Single-window clearance and industry status for the entire real estate sector, two of the long-standing demands of developers, also feature in their wishlist.Honey Katiyal, founder and CEO of Investors Clinic, said there are still some untouched issues to be addressed in the upcoming Budget. "The important among them are banks and NBFCs funding norms, single-window clearance for all the approvals to reduce project timelines, digital shift for efficient performance and grant of 'industry' status to attract equity investment," Katiyal said.Shishir Baijal, Chairman and Managing Director, Knight Frank India, said the government should consider providing industry status to the real estate which would enable developers to raise funds at lower rates and augment their execution capabilities.Further, under the ambit of affordable housing, the government can enhance the eligibility for CLSS (Credit Linked Subsidy Scheme) and GST rate benefits for a larger section of consumers in urban centres, he added.Baijal also emphasised the need to push for 'real estate investment trusts (REITs)'."While the government has taken measures to provide fiscal incentives in earlier budgets, we have seen only one REITs listing so far. The government can further push the REITS agenda by reducing the timelines of investment from 3 years to 1 year for capital gains taxation, which will ensure larger retail investor participation," said Baijal.Rahul Grover, President, Sales and Operation at Sai Estate Consultant said: "We hope that policies which will be introduced in Budget 2019-20 will lead to hastening the one-window clearances for high-rise projects and influence developers resulting in higher rating in LEED (Leadership in Energy and Environmental Design) certifications."( With inputs from IANS )

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Hiranandani, Latest News

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National :Developers want Budget to ease liquidity, make changes in GST

As the new Finance Minister Nirmala Sitharaman presents the Union Budget for the fiscal 2019-20 on July 5, the real estate players want the Budget document to feature steps to improve the liquidity situation with a proposal to re-introduce Input Tax ...