Builders will have to pay royalty on construction materials
City-based developer said that realty prices could rise by 10 per cent. Builders say if suppliers of raw materials don’t reduce prices, they will be forced to pass on the royalty burden to property buyers.
The Gujarat Government on Thursday has passed a resolution to charge royalty on minor minerals used as building materials from the end-users with effect from April-1. This effectively means that builders will have to pay royalty for the use of bricks, sand, clay, granite, sandstone and other materials. While the step will simplify the process of royalty payment and reduce revenue loss, it may make homes costlier.
Builders say if suppliers of raw materials don’t reduce prices, they will be forced to pass on the royalty burden to property buyers. According to the new rules, builders will face the said levy for every new property with a built-up area of 50 sq mt or more. Structures with a built-up area of less than 50 sq mt will get exemption. A city-based developer said that realty prices could rise by 10 per cent as the rate of royalty on building materials is 8 per cent.
The minister of state for industries & mine, Saurabh Dalal said the change would come into effect on April 1. The levy would be calculated when developers submit their building plans. “It will be the responsibility of the AMC and AUDA to collect royalty from builders when the latter submit their project plans. The workload of state industries & mines department will decrease,” he said. “The decision has been taken to bring transparency and simplification in the process. Gujarat thus became the first state in the country to effect such a change,” he added.
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