Emaar MGF spokesperson on budget expectations:
"Though most of the policy frameworks in real estate sector come under state government's purview, There are primarily two concerns which need serious attention in the budget. The government should hasten the implementation of GST because presently there is disparity in tax treatment of works contracts across various states under respective VAT laws. At present the services part is covered by a central statute while the goods portion is covered by state statues which is leading to situations where total taxable value of goods and services portion of the contract is exceeding the actual value of the contract. GST will ensure a uniform treatment of goods and services forming part of composite agreements of works contractors and developers. This will not only help the industry but will lead to lower price for the customers.
Another issue which needs to be addressed is at present service tax law that subjects the tax payer to a number of investigating and enforcement agencies leading to multiplicity of cases for the same period or same issue. The law needs amendment in a way that investigation should be conducted by a single agency and matters once explained to the satisfaction of investigating agency must not be raised again and again.
Real estate, as an industry is a large contributor to the GDP and also supports almost 250 subordinating sectors like, ceramics, fittings and fixtures, electric and electrical equipments, cement, labour etc. Always having this huge potential, if given a little fillip, real estate would play an important role in propelling GDP and would help it reach magic figure of 9% in next two-three years.
There are many fiscal and monetary stimuli the Union Government can award to this sector to give a boost. First is bringing real estate into infrastructure ambit. This will ensure application of infrastructure policies to this sector as well and will directly benefit the sector in terms of availability of funds. Secondly, government should extend home loan principal repayment exemption limit from Rs 1 lakh to minimum of Rs 3 Lakh from taxable income under Section 80C/80CCC/80CCD. This is an immediate requirement which will benefit home buyers' pockets and in turn will boost sales. Also, currently there is an income tax benefit of Rs. 1.50 Lakhs per person for the amount paid towards interest component of a Home Loan. This benefit was introduced in year 2001 and in last 13 years property prices have moved up two to three times.
Government, therefore, should extend this limit to a minimum limit of Rs 3 Lakhs. The third angle government must attend is the policy framework for REITs. REITs have been long awaited by India's real estate industry, as India moves in to a high GDP growth it will require supporting infrastructure of commercial, and office space to create. REITS is one of the best and transparent ways to fund this growth, with both Domestic and International investors keen to invest in to a high growth economy. Government must bring in the necessary legislations and guidelines to enable roll out of REITs, this has the potential to boost not only Real Estate sector but also the upstream sectors like cement and steel and create large scale employment across various skill levels. Real estate, as an industry is a large contributor to the GDP and also supports almost 250 subordinating sectors like, ceramics, fittings and fixtures, electric and electrical equipments, cement, labour etc. Always having this huge potential, if given a little fillip, real estate would play an important role in propelling GDP and would help it reach magic figure of 9% in next two-three years."