CREDAI demands cut in GST and easier bank financing for affordable housing

Realtors' apex body CREDAI, has demanded a reduction in GST as well as easier bank financing options for purchasing land to build affordable housing schemes. The apex body has also asked for a single-window clearance for approval of real estate projects in order to boost the sector.

CREDAI President Jaxay Shah stated that the real estate sector in India was heavily affected by the implementation of demonetisation, GST and the new realty law last year, which has led to a serious decline.

He added that the real estate industry is facing a “critical moment”, and needed that the Ministry of Housing & Urban Affair should take up these issues with the Indian government on its behalf. “We need proper treatment for this industry. We are into nation-building. We are the safest investment industry. We have 3-4 major demands,” Shah stated.

The Indian real estate sector has witnessed a slowdown over the last couple of years post demonetisation, implementation of GST as well as new bills.

There is a need for affordable housing for which banks should provide easy financing options to purchase land. Shah added that the area norm should be removed for the middle-income group so that more people can buy homes under government subsidy scheme CLSS (credit-linked subsidy scheme).

He demanded that GST (Goods & Services Tax) rates should be rationalised to give a boost to the sector. Similar to affordable housing, GST should be 8% for the entire sector which would help boost demand for under-construction flats. Currently, the effective GST rate is 12% after land abatement and there is no GST on completed flats.

CREDAI Chairman Getamber Anand stated that proper land abatement should be there in the sector as prices of land differ for city to city. CREDAI NCR President Pankaj Bajaj added that the government should provide abatement on the basis of circle rate for different cities. The association added that the issue of delay in projects approvals, especially environment clearance, should also be expedited. CREDAI stated that India’s ranking in ease of doing business will see an improvement if the government decides to have single-window clearance for real estate projects.

RERA which came into effect last year has made developers and brokers accountable for projects, but not the government authorities. CREDAI has 12,000 builder members in 23 states and 178 city chapters. The apex body organised a conclave in Delhi at Taj Palace last month which saw participation by about 600 developers. The issues faced by developers were discussed at length, and the need for government support was demanded by CREDAI.