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« Realty Prices to Increase from July | Home | India in Hiring Mode- Hiring on for Real Estate Sector »

NAREDCO to Review Impact of Service Tax on housing Sector

Realtors body NAREDCO said it will hold a meeting of its members to assess the negative impact of imposition of service tax on housing complexes under construction. “We will call a meeting of the association to discuss the Budget proposals, particularly the levying of service tax on housing which will have a negative impact on realty sector,” National Real Estate Development Council (NAREDCO) President Rohtas Goel said. Goel, who is also the Chairman and Managing Director of Omaxe Ltd, said the dates for meeting has not been decided yet. The country’s two largest realty firms DLF and Unitech are members of NAREDCO.

According to the Budget paper, the construction of real estate complexes will attract service tax, unless the entire consideration for the property is paid after the completion of construction. While some developers are of the view that the service tax of 10.3 per cent would be imposed on 33 per cent of the total sales value, other feel it should be on 33 per cent of the total construction cost. An official with leading realty firm said the levy of service tax on housing is detrimental. “Affordable housing will become non-affordable and black money would come into play due to this proposal,” he said. Another realtor’s body CREDAI had said that applicability of service tax to all under-construction flats and homes being booked prior to completion will increase the end cost and will significantly impact affordability of the home buyer.

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