The Mumbai Metropolitan Region’s (MMR) top real estate association, CREDAI-MCHI, has demanded a thorough examination of the Goods and Services Tax (GST) system as it relates to the real estate business. The organisation expressed concerns about the effects of GST on affordable housing, rehabilitation projects, and redevelopment in a formal submission to Shri Pramod Sawant, the Hon’ble Chief Minister of Goa and a member of the GST Council.
With more than 14,000 crumbling structures and 70 lakh people living in slums, Mumbai has a serious housing shortage. In order to address these problems and create more housing stock and better living circumstances, redevelopment is essential. and reduced demand in a market that was already weak. The GST levied on these developments, according to CREDAI-MCHI, is a source of concern since it has a negative impact on both developers and homebuyers. In a market that was already weak, the lack of the Input Tax Credit (ITC) has driven up costs for buyers and decreased demand.
Other urgent issues brought to light by CREDAI-MCHI include the GST on Transfer of Development Rights (TDR) and the Rs 45 lakh threshold for benefits related to affordable housing. In addition, developers have to pay GST at rates of 18% or 12% in the absence of an input tax credit for the construction of both sale and rehabilitation structures. Despite these expenses, the GST authorities have imposed GST on the program’s rehabilitation component, forcing owners of slum and run-down buildings to pay GST on the apartments they already own. This levy, which amounts to double taxes, is perceived as anti-poor and goes against the spirit of the GST regime.
The group is in favour of more flexibility and suggests giving developers the choice to select the 5% GST rate without ITC or the 12% GST rate with ITC. This flexibility would help ensure ITC cost savings are passed on to homebuyers while allowing developers to continue delivering large-scale affordable housing projects.
CREDAI-MCHI remains committed to working with the government to address these issues and drive growth in the real estate sector while ensuring the availability of affordable and safe housing for Mumbai’s residents.
CREDAI-MCHI is an apex body comprising members from the Real Estate industry in the Mumbai Metropolitan Region (MMR). It is a part of CREDAI National which has over 13,000 members. CREDAI-MCHI is the only government recognised body for private sector developments in MMR and currently has a membership exceeding 1,800 developers. Through the organisation, its members aim to preserve, protect and advance the right to housing for all.
Source: Prop News Time
