CREDAI May Go to Court if Service Tax on Land is not Removed |
- CREDAI May Go to Court if Service Tax on Land is not Removed
- Real estate back at pre crisis level
- Only 25% Delhi Property Owners Pay Property Tax
- Positive Change in Commercial Office Space Sector
| CREDAI May Go to Court if Service Tax on Land is not Removed Posted: 30 Mar 2010 09:23 PM PDT
Jain, who is also the chairman of realty major Parsvnath, said the industry body would convene a national meeting to discuss the option of using legal machinery if its request was not met when the Finance Bill was accepted. Realty developers already pay different types of taxes under various heads, including stamp duty on land cost and addition of one more tax would only put extra burden on consumers, he added. "We had a meeting with the Service Tax Department and submitted our post-Budget memorandum to officials. Now, we are seeking a meeting with the finance minister or his officials for the same," he said. Finance Minister Pranab Mukherjee, in the Budget for 2010-11, brought development of real estate complexes under the ambit of service tax, unless the entire consideration for the property was paid after completion of construction. Finance ministry officials later clarified that the service tax would be imposed on 33 per cent of the total selling price, which, the real estate players said, effectively means about 3.5 per cent cost escalation for the buyers. When asked if there was any possibility of revoking the taxation proposal, Central Board of Direct Taxes member Durgesh Shankar said: "We can't say anything now as constant discussions take place for various proposals, but there are never closed minds." He said all proposals were made after due deliberations and anticipating repercussions also, if any. Last week, Urban Development Minister Jaipal Reddy had said his ministry would approach the finance ministry within a few days for a review of the proposed service tax on housing complexes under construction as it felt the levy would hurt the sector, which is yet to recover from the recession. "The urban development ministry feels the proposal of service tax made in the Budget needs review. I am recommending the review of the proposal by the finance ministry," he had said. K P Singh, chairman of the country's largest realty firm, DLF, had also asked not to impose service tax at this time as the sector was not in a "correct shape". |
| Real estate back at pre crisis level Posted: 30 Mar 2010 10:00 AM PDT
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| Only 25% Delhi Property Owners Pay Property Tax Posted: 30 Mar 2010 08:00 AM PDT
'The respondent (MCD) states that until 2004, the property tax department used to send bills to the owners of property…. After 2004, when self-assessment scheme was implemented, the MCD has not been able to clearly identify which properties have paid property tax,' noted information commissioner Shailesh Gandhi in his order dated March 25. 'The respondent admits that whereas there are about 40 lakh (four million) properties in Delhi, only about nine lakh pay property tax. This is indeed a startling revelation and if the city taxes less than 25 percent of properties it is a very sad comment on the way it is being administered,' he added. |
| Positive Change in Commercial Office Space Sector Posted: 30 Mar 2010 04:21 AM PDT
Experts tracking realty developments say that out of the new jobs being created, 80% will be in the IT sector alone, with the corporate sector accounting for the rest. Also, with new vistas being thrown open by US President Obama's recent healthcare push—which may trigger an outsourcing spree in health and knowledge sectors—both job and office space markets may see major gains. Though the office space market has not been able to bring prevalent vacancies under control, there is scope for growth for realty, according to experts. In an interaction with the media, Collin Dyer, president and CEO, Jones Lang LaSalle Inc, says India presents a huge opportunity in terms of attracting jobs outsourced by US firms. India has graduated from being a back office hub for Western companies to housing knowledge process outsourcing centres and research and development wings of multi-national firms. "Asia, which includes robust nations like India, has shown signs of an economic revival, and these are more evident that those seen in economies like the European Union, because of strong banking and financial systems present here". According to Jonse Lang's India Office Map 2010 findings, the demand for office space is gradually improving with opportunistic tenants taking up space at lower rentals. The markets in Mumbai and Bangalore are leading the property cycle and are likely to recover the earliest among office-space markets. Also, the markets of NCR-Delhi, Chennai and Pune are expected to stabilise sooner that those of Hyderabad and Kolkata. However, the real estate sector, which has been showing signs of a revival, could come under severe pressure if builders resort to a price hike to cash in on the emerging demand in the residential and commercial office space sectors, says Anuj Puri, chairman and India head, Jones Lang LaSalle Meghraj (JLLM). The builders in Delhi and Mumbai may have hiked the prices of residential apartments when sales were picking up, resulting in a slowdown in apartment sales. |
The Confederation of 
Reserve Bank Governor D Subbarao, governor, RBI, says that India needs to exit accommodative policy before other countries. 
Only 25 percent of the 
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