Realtors seeks input tax credit under GST to boost housing segment

One of the most important questions pending for a while is “industry” status for the sector.  

Almost all stakeholders are looking forward to Finance Minister Nirmala Sitharaman’s Budget 2022 announcements, wishing for some positive transformations. 

Below are some fundamental questions from the real estate community. 

Modification of the SEZ Act - 

With the enactment of a sunset clause, the forthcoming development capability for SEZ is under the scanner. SEZ developers and occupiers are strongly demanding revision of some rigid clauses of the act. 

Housing loan-related tax incentives - 

Homebuyers have been petitioning to increase the tax deduction limit on interest for home loans. This would curtail the cost of financing units for home buyers, increasing housing demand. 

Input Tax Credit for developers - 

The current GST rate applicable on under-construction residential units is 5 percent, for cement and steel is 28 and 18 percent respectively. With developers not authorized to claim Input Tax Credit against these tax outflows, construction costs will only increase. 

Reduction in holding period of REITs for long-term capital gains - 

To ensure a level playing field and increase the commercial participation in REITs, contrasting the current situation, the government should reduce the holding period for REITs to 1 year immediately.