Real estate pre-budget expectations quote

Payal Thaker - Partner, Indirect Tax, BDO India

Certain areas of concerns that can be addressed relating to real estate sector are as under:

1. The developers should be allowed the option to choose between payment of GST at a concessional rate without input tax credit (ITC) or payment of GST at higher tax rate and availing ITC for residential projects. 
2. In addition, while the Government had appealed against a judgment allowing ITC on the goods and services used for construction of commercial real estate projects (malls or offices etc) which are leased, the industry would look forward to a policy decision to allow the ITC in such cases, since such inputs are clearly used for provision of output supply of leasing.
3. Further, a clarification that various transfer of various land related rights, such as lease hold rights, transfer of development rights (‘TDR’), floor space index (‘FSI’) on premium is outside the purview of GST would also be welcome.
4. Construction services provided without any consideration to tenants/ society members and slum dwellers in connection to redevelopment should be free from GST implications.
5. Affordable residential apartment meaning should be defined basis the carpet area of the apartment and not basis gross amount charged, since in metro cities, the value of apartments can be significantly higher due to high land costs.