Naredco demands GST rate cut to 8% for construction sector
The National Real Estate Development Council (Naredco) has called upon the Central government to rationalize the GST rate on under-construction properties to 8 percent from the current 18 percent. The real estate sector is passing through a difficult phase because of the regulatory and financial reforms such as demonetization and RERA, said, President, Naredco, Niranjan Hiranandani. The body has suggested a number of steps to help address the concerns, and help the sector improve liquidity. After RERA, the requirement of product liquidity has gone up three times because 70 percent of the money is placed in escrow accounts and 30 percent can be used. So, the surplus from the project cannot be used in another project, so, the amount of liquidity required has gone up. In the last two years, the liquidity crisis has been met by funds coming from NBFCs. This suggestion is also reflected in the pre-Budget memorandum submitted to the government. Among others, the body has recommended greater promotion and improvement in effective rate of return from rental housing through tax incentives.
📅Published on:
23 January 2019
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