34th GST council meeting highlights.

Mar 25,2019 / By Supriya Mogarala / No Comment

34TH GST Council meeting in INDIA Highlights:

Decisions captured by the GST Council in the 34th meeting held on 19 March 2019 concerning GST rate on Real Estate Sector at New Delhi has discussed the details for implementations of the proposals made by the council in its 33rd meeting for lower efficient GST rate of 1% on affordable houses and 5% on the construction of houses except affordable house. The council has made a decision that the approach of the transformation is as follows:

Option in that respect of ongoing projects:

• The promoters shall be given one time option to pay tax at the previous rates (8% or 12% with ITC) on ongoing projects (projects where the construction and booking have started before 1st April 2019) which have not been finished by 31st March 2019.

• The option shall be operated once within the prescribed time frame and where the option is not regulated within the prescribed time limit, the latest GST rates shall be applied.

New Tax Rates:

New tax rates shall be appropriate to new or ongoing projects which have operated the option to pay tax in the new government are as follows:

New rate of 1% without ITC (input tax credit) on the construction of affordable housing will be available for all houses those who meet the description of affordable houses as determined by the GSTC and affordable houses being established in ongoing projects existing under the central and state housing schemes presently eligible for compromising rate of 8% GST (after 1/3rd land discount)
The new rate of 5% without input tax credit shall be suitable for the construction of all the houses other than affordable houses unless the affordable houses are booked before 1st April 2019. New rates shall be available to pay on installments on or before 1st April 2019. Also, commercial properties in which the carpet area is not more than 15% of the total carpet area of all the properties.

Circumstances for the new tax rates:

The new tax rate of 1% (on affordable housing) and 5% (on other than affordable houses) will be available under the following conditions.

The input tax credit may not be available

80% of input services can be purchased from recognized and registered personalities on the shortfall of purchases from 80%. Tax should be paid by the builder at 18% on RCM basis. However, tax on cement purchased from the unregistered person should be paid at 28% under RCM and RCM under capital goods at applicable rates.

Conversion for ongoing projects electing for the new tax rates:

• Ongoing projects and projects that have not been completed by 31st March 2019 opting for new tax rates shall changeover the ITC according to the prescribed method

• The changeover formula approved by the GST Council for residential projects to deduce the ITC taken for percentage completion of construction as on 1st April 2019 is to arrive at ITC for the entire project and then based on the percentage booking of flats and percentage invoicing the ITC eligibility is the determined transition would thus be on the pro data based on a formula that credit in proportion to the booking of the flat and invoicing done for the booked flat available to subject to a few safeguards.

The following analysis that will be applied to TDR/FSI and Long term lease for those projects those originate after 1st April 2019:

• The supply of long term lease of land by the owner to the developer will be an exempted subject to the condition that the constructed flats are sold before the issuance of completion certificate and tax paid on them. The exemption shall be withdrawn in case of flats that are sold after the issuance of completion certificate, but such withdrawal will be limited to 1% of value in the case of affordable housing and 5% of the value in case of those other than affordable housing. This will achieve fair taxation between the under construction and ready to move property.

• The accountability to pay the tax on TDR, FSI, and long term lease will be shifted from the landowner to the builder under the reverse charge mechanism (RCM)

Modification to ITC Rules:

• ITC rules will be modified to develop the clarity on the monthly and final determination of ITC and reversal theory of Real Estate projects. The change would clarify the procedure for accounting the input tax credit to commercial units that would continue to be eligible for input tax credit in a mixed project.

• The decisions of the GST Council have been presented in the simple language for better understanding and the same would be effective through circulars which alone shall have the force of law.

The progress for the implementation certainly of the new tax structure is acknowledged as it will give enough time to adapt operations to the latest structure. Justifying GST on under construction properties has been one of the Real Estate sector’s foremost requests. The move to reduce GST, combined with the implantation of RERA, will boost the demand and firmly renovate the sector.

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Noida Metro Aqua Line: A Boon to Noida & Gr. Noida’s Real Estate

Feb 20,2019 / By sunil deo / No Comment

The much awaited ‘Aqua Line’ of Metro Rail from Noida to Greater Noida was flagged off by Uttar Pradesh Chief Minister Yogi Adityanath and Union minister Hardeep Singh on January 25, 2019.

Vision: “A World Class Metro with Sustainable Development”

Mission: “To Provide Safe, Reliable & Eco-Friendly Transportation Services For People”

Highlights:

The final and mandatory safety inspection of the corridor was done last month by the Commissioner of Metro Rail Safety (CMRS) which gave its approval of the NMRC for launching commercial operations.
Known as the Aqua line, the two Real estate hotspots metro would run between Sector 51 in Noida and Depot Station in Greater Noida.
The 29.7-kilometer (18.5 mi) Aqua Line has 21 stations. The line starts from Noida Sector 51 metro station and will run through sectors 51, 50, 76, 101, 81, NSEZ, 83, 137, 142, 143, 144, 145, 146, 147 and 148 in Noida; after this it will enter Greater Noida and will go through Knowledge Park-II, Pari Chowk, Alpha-1, Delta-1 and GNIDA Office before terminating in Depot Station. The entire route will be on elevated track. This line will have an interchange station with the Delhi Metro at Noida Sector 52 metro station.
The 49th battalion of the UP Provincial Armed Constabulary has been entrusted with the responsibility of security on the Aqua Line, while some private security agency will also be deployed soon.
The security personnel of the Aqua Line metro is being trained by the CISF (Central Industrial Security Force), which also guards the Delhi Metro.
Clocking an average speed of 37.5 kmph. Trains are designed to run at a maximum speed of 80 kmph.
All the stations will have platform screen doors for passenger safety. As of now, 102 lifts and 81 escalators have been commissioned.
The Aqua line will have 19 rakes with 4 cars each. These all are lightweight cars made up of stainless steel. A four-coach rake will be able to carry 1034 passengers (maximum capacity).
NMRC will have its own security system, ticketing system, and metro cards. Aqua line Metro cards will not be valid on Delhi metro and vice versa.

Connectivity to Delhi metro (Blue line metro):

After getting off the Aqua Line, a commuter has to cover a stretch of 200 meters to take Delhi Metro’s Blue Line at Noida City Centre metro station as the Aqua Line does not directly connect the commuters with Blue Line metro.

Fare:

The Noida Metro Rail Corporation Ltd had in December 2018 announced fares for the Aqua Line, with the minimum being ₹9 and the maximum ₹50. Commuters could by QR-coded paper tickets or use smart cards to take a ride.

Impact on Realty:

Developers, who have built residential projects in Greater Noida and Noida property markets pitch affordability as their USP’s when compared to Delhi and Gurgaon, Property in Noida and Greater Noida is way more affordable.

Still, builders are struggling to find buyers for their affordable housing projects, reason could be the absence of robust transport network was the biggest cause why homebuyers were not keen to invest in past half a decade amid rising new project launches in Noida and Greater Noida The Aqua line would inspire the home seekers to start making a move now also the housing demand and prices may rise in Noida and well as Greater Noida, with the launch of a new metro rail service, linking the twin cities in western Uttar Pradesh, according to real estate developers and consultants.

People who already own a property in Noida and Greater Noida would see the connectivity pain disappear, and worth of their asset moving up. Investors, who invested on the property here for rental income can relax and have a reason to cheer as they will have more takers due to improvements in connectivity, tenants willing to shell out more money. According to Haris Murshid of the Skydeck Infrastructure, rental prices may go up by five or six percent.

Aqua Line to boost housing demand in Noida, Greater Noida: Experts

”The upgrading of Infrastructure due to metro connectivity is expected to help in drive the demand for residential units in the region. Also, it is expected to have a positive fallout on the commercial and retails segments, as well,” said Abhinav Joshi, head of research for CBRE India. In the past also, Joshi said, metro lines have played a crucial role in uplifting the real estate profile of areas that it connects.

Realtors’ body CREDAI said that sectors along the Noida Expressway will have better connectivity now.

“Commuting will become easier from places like Noida Extension too. The market works on sentiment and the sentiment is positive in the real estate sector,” said Prashant Tiwari, president of CREDAI western UP. With improved infrastructure, he expects demand and rates for properties in Noida and Greater Noida region to get a big boost.

The new metro line has provided great relief to home buyers of this area, said Deepak Kapoor, director, Gulshan Homz. Dhiraj Jain, the director, Mahagun Group, said the benefit of the metro will be shared by both, the residents as well as the real estate sector.

“The inauguration of the Aqua Line will also hike the rates of the units by 20 percent in the area, along with a boost in sales,” Jain said. Sagar Saxena, project head for Spectrum Metro, said several commercial and housing projects are being developed in sectors along the route of the Aqua Line. “This is a big day for the realty sector of Noida and Greater Noida,” he said.

Around 2006, several projects were launched in sectors 74, 75, 76, 77, 78, 51 and 50, when the average rates at that time were approximately Rs 2,000 per sq ft, said Haris Murshid of Skydeck Infrastructure, a commercial property consultant. “Today, the rates in these sectors is approximately around Rs 4,500 per sq ft,” Murshid said, adding that there would be no immediate impact on prices. “Maybe, after 1.5 or two years, the impact will be seen. As of now, only rental prices may go up by five or six percent,” he said.

Trends & Updates

A Comparative Analysis by Commonfloor for Noida & Greater Noida Real Estate Market has shown a steady but positive sentiment towards the Property Transactions post the announcement of the Aqua Line.

Listing Trends:

Property Listings in Noida & Greater Noida has shown a steady decline till Sep’18, then shown a steady growth on month on month basis. Expansion of Noida Metro i.e. Aqua Line may be a main factor behind the same.

New Launch Inventories:

Newly Launched Inventories have shown a tremendous incline from 580 Inventories in Quarter 2 2018 to 1653 Newly Launched Inventories in Quarter 3 2018. Though there are a slight dip in First Quarter 2019 i.e. 818 Newly Launched Inventories in Jan’19, it can be increased at the end of the Quarter as more & more Investors & End users are heading towards Noida & Greater Noida.

Price Trends:

Sector 144 has shown a maximum appreciation of 0.13% in Basic Price from Quarter 2 to Quarter 4 in 2018, followed by Pari Chowk & Alpha – 1 with an appreciation of 0.08% each.

Similarly, Sector 50, Sector 51 & Sector 143 have shown a decline in Basic Price of 0.08% from Quarter 2 to Quarter 4 in 2018.

Since, Noida, Noida Extension and Greater Noida will get better approachability to the national capital of Delhi, property in these markets would become even more remunerative as an investment option.

The sigh of relief to the national capital Delhi as more and more people would move to Noida and Greater Noida with increased mobility and the affordable market, Delhi where the housing options are very limited and expensive while migrant population numbers rise year after year.

Traffic on Delhi roads would decrease, too, as more and more people would take a metro ride to work. It is worth mentioning that authorities have been struggling to decongest Delhi roads, but the desired results have yet to be achieved, With a Metro network in place, traffic on roads would subside, the commute will be easier, pollution levels will come down.

The NMRC project has also generated significant direct and indirect employment of skilled, semi-skilled and unskilled workforce.

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Pune gets a final nod on Hinjewadi-Shivaji Nagar Metro Line

Dec 11,2018 / By Priyanka / No Comment

After the state government confirmed the third metro line as a ‘vital important urban transport project’ on July 18. On September 18, the ministry of housing and urban affairs has given the green signal for the third metro line from Hinjewadi-Shivajinagar and published the proposal in the center’s Gazette.

The 23.3km-metro line will have 23 stations and will ease travel in the Maharashtra Industrial Development Corporation (MIDC), PMRDA Pimpri Chinchwad Municipal Corporation and Pune Municipal Corporation areas. This is the third metro line to be managed by Maha Metro.

PMRDA has completed the tendering process and Tata -Siemens Company has won the tender to implement the project as a joint venture and is waiting for the final clearances from the state government for going into an agreement with the PMRDA.

The project, set to cost Rs 8,313 crore, is targeted at addressing the traffic woes faced by the approximately 2 lakh IT professionals, who work in Hinjewadi. This will also be the first project in the country executed under the Metro policy of 2017, which aims to minimize the financial burden on the center.

The central government has allotted Rs1, 200 crores, while the state will provide Rs800 crore in the form of land banks. The remaining has to be generated by the auction-goer by monetizing the land banks. Just as with the Public-Private Partnership model (PPP), the center and the state will account for 20% each of the project cost.

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Bengaluru’s PRR will be an Elevated Corridor now

Sep 13,2018 / By Priyanka / No Comment

The Bengaluru Development Authority has decided to make the much delayed Peripheral Ring Road (PRR) an elevated corridor that will be assimilated with Namma Metro. The decision was taken at a meeting chaired by Deputy Chief Minister Dr. G. Parameshwara, who also chairs the BDA, last week.

BDA Commissioner Rakesh Singh said, “We have prepared a cabinet note and will start work on the Detailed Project Report (DPR) after the cabinet grants approval.”

The PRR, a 65-km ring road around the city, has been in the pipeline for more than 20 years. The Japan International Co-operation Agency (JICA) was ready to fund the infrastructure part of the project. However, the land acquisition cost, which was to be borne by the State government has blown up to over ₹8,000 crore, putting the project in the middle

To reduce the land acquisition cost, the BDA has decided to make PRR into an elevated corridor. It was also decided to integrate a Namma Metro line on the median. Going elevated and integrating a Namma Metro line will definitely raise the infrastructure cost of the project. The BDA will start fresh negotiations with JICA over the loan,” a senior official said.

Work on Shivarama Karanth Layout picks up the pace

Bengaluru Development Minister and Deputy Chief Minister Dr. G. Parameshwara said that the proposal for the final notification for 3,564 acres in 17 villages near Doddaballapur will be approved by the cabinet soon. The layout is estimated to have over 19,000 sites.

The project clashed after the High Court defeated the preliminary notification in 2015 following several lawsuits by land-owners. But in August, the Supreme Court had directed the State government to do a final report for land acquisition for the layout in the coming three months.

Dr. G. Parameshwara also said that the next installment of 5,000 sites in Nadaprabhu Kempegowda Layout will be given away through a lottery from among applicants on September 25, 2018.

Repayment on BDA flats

The BDA has decided to give a refund on its flats. It will offer a 5% rebate on all flats and a 10% discount for those who buy more than 10 flats at a time.

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Metro Extension to Boost Ghaziabad Real Estate Market

May 29,2018 / By Priyanka / No Comment

The Metro construction work is in full progress to connect the extended pockets of Ghaziabad via Metro, from Dilshad Garden in Delhi to the New Bus Stand in Ghaziabad’s Madhopura. The trial runs on the 9.41-kilometre stretch had been deferred from March to June while the line is expected to be operational by September this year.

After too many delays, the things would soon be on a fast track as the Ghaziabad Development Authority (GDA) and the Delhi Metro Rail Corporation (DMRC) have finalized the funding model.

According to sources, the slowdown in the real estate sector, among others, are the reasons for a delay in payments. According to the note prepared by the GDA, the agencies and departments such as the UP State Industrial Development Corporation (UPSIDC), UP housing board, the GDA and the Ghaziabad Municipal Corporation (GMC) will be able to fund 10 percent of the total project cost of Rs 4,048 crore.

The latest deadline (September 2018) is subject to the final approval from the Centre and release of funds by the Ghaziabad Development Authority (GDA).

Metro Project: In 2014, an agreement was signed between the DMRC and the GDA for the development of this Metro line. The elevated corridor under Phase-III will have eight stations – Shahid Nagar, Raj Bagh, Rajendra Nagar, Shyam Park, Mohan Nagar, Arthala, Hindon and New Bus Adda. Close to 90 percent of the work has been done, which covers structural works on 12 out of 14 Metro station buildings.

Cost of the Metro Project: The project is being developed at a cost of nearly Rs 2,210 crore with about Rs 1,479.6 crore shared between various agencies based on the funding pattern sanctioned by the UP cabinet.

The share allocation for the various agencies are Rs 695.8 crore for the GDA, Rs 246.35 crore for the GMC, Rs 440.45 crore for the UP Awas Vikas Parishad and Rs 97 crore for the UPSIDC.

Reason for the Delays: While the GDA has been prompt in submitting its share, which includes Rs 80 crore on land, the other agencies have slowed down and have been asked to pay in installments.

This delay in financing has been one of the main reason, besides issues in the land acquisition that extended the project deadline by a year.

Impact on Real Estate: The new Metro line will pass through the Sahibabad Industrial Area and will considerably impact the residential market in the areas lying in the vicinity where the infrastructure is poor.

Once the Metro line is operational to the public, the projection of the areas lying along the Metro corridor would develop which is at present limited to the lower-middle-income segment. Connectivity to Mohan Nagar from Dilshad Garden would improve. Presently, the route remains chock-a-block all the time.

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Category : Infrastructural development