GST redevelopment project costlier!

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Council refuses to provide relief; Push the developers

Council refuses to provide relief ; Push the developers

Due to the state’s proposal to cancel the ‘Goods and Services Tax’ (GST) for the redevelopment project in the state, the GST Council has shown Kareachi basket because the developers of the redevelopment projects are shocked. On one hand, it is cheaper to implement projects on an empty plot than it is, and redevelopment projects have become expensive compared to that. More than half of Mumbai’s buildings are considered to be a major disaster due to lack of options without redevelopment.

In Mumbai, the plot of the plot is only as countable as the fingerprint. It is a fact that in future due to the difficulty of getting free land in Mumbai, there is no alternative without redevelopment. Developers are not very interested in implementing the redevelopment project. The provision of GST has caused a big pit in his patch. Therefore, it is being expressed that the developers are difficult to come forward to implement the redevelopment project in the future.

There is a need to pay zero GST while implementing a project on an empty plot. The stamp duty is levied only on the purchase of an empty plot project. At the same time, the implementation of the redevelopment project involves a double tax on stamp duty and GST such as development agreement, lease rent, development rights transfer etc. Recently, GST Council, while giving relief to this, canceled the double taxation system for residential plots. However, attention is being given to the relief not being given to the redevelopment projects.

In Mumbai, slum rehabilitation schemes, MHADA, old and dilapidated and private buildings redevelopment projects are implemented. The project is accepted by the developer and the claim is accepted. 12 percent GST has to be paid with market stamp duty. To build these houses, cement, steel, workers and different types of contracts are to be issued. For this, GST and construction contract tax has to be paid. It does not get taxation. Therefore, the developers have to spend a certain amount of money to build free houses in the redevelopment. This tax system is not applicable to the development of an empty plot. Maharashtra Chamber of Commerce and Industry (CADE-MCHI) Chief Minister Devendra Fadnavis had said that redevelopment projects should be exempted from GST. In the slum redevelopment project, the hut is required to pay 12 percent GST for the house while handling the house.

After the intervention of the Chief Minister, the Finance Ministry has sent the proposal to the GST Council. Since this proposal has not been considered, the challenge for the developers, who are implementing the redevelopment project, remains a challenge.

It is cheaper to implement projects on an empty plot rather than implementing the redevelopment project. The cost of redevelopment can be considered for the cost of purchase of the plot. For this, because of the double taxation of stamp duty and GST, the developers have to face big trouble in the redevelopment.    

Source: https://www.loksatta.com/mumbai-news/gst-in-india-1855469/

 

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