Property Cost in Maharashtra is Expected to Get Costlier as Buyers Have to Pay Input Tax Credit
The Confederation of Real Estate Developers Association of India (CREDAI) in its annual general meeting which was held in Kolhapur on 8th June 2019 has decided to pass the responsibility of Input Tax Credit to buyers. This move by CREDAI is expected to increase property prices in Maharashtra by Rs.200 per sq ft.
Rajiv Parikh, President of CREDAI has informed that a discussion was made which influenced the industry body to take the decision. However, the effective date of the same is yet to be determined. The industry body will follow up with the State government regarding the same.
Shantilal Katariya, Vice-President, CREDAI, has added that builders are paying 13% tax on all construction materials to the government but they are not recovering the same from the buyers. Input Tax Credit is a part of the Goods and Services Tax (GST), which is applicable in case any goods or services are furnished to a taxable person. Builders were not passing this tax to the buyer.
He also added that CREDAI will follow up the government in this concern.
Earlier a resolution was passed in this regard, asking the government to possess equal provision for RERA as all states have different terms under RERA, which was giving difficulty for business.
As per vice-president of CREDAI, builders in Maharashtra are the most affected as the state alone has a share of almost 50% of real estate business due to rapid urbanization. If there will be an equal RERA in all states, it would ensure a smooth business environment.
In another initiative, CREDAI complimented the government’s decision to amend the Land Title Act. However, to avoid litigation in future, search report for land will be prepared by the state government and not a private lawyer. As a result, it will bring down the number of litigation.
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the government’s decision to reduce the Goods & Service Tax (GST) rates for under-construction projects to 5% from the effective rate of 12%. Keeping in mind the objectives of “Housing for All by 2022”, the government has reduced the GST to marginal 1% for affordable housing. Apart from that, completed projects which have received Occupancy Certificate (OC) will not attract GST.