The Confederation of Real Estate Developers’ Associations of India (CREDAI) further questioned the issue of service tax being brought out at a time when the goods and service tax is expected to be introduced in 10-12 months and has submitted to the Ministry of Finance, a representation on the provisions of the Finance Bill, 2010.
“We have put forth our concerns and recommendations and also discussed the probable impact of the provisions with the Ministry. We are hopeful that the Government will understand the implications and not burden the consumer as we feel that in its present form, while some small amount may be collected through this tax, the overall negative sentiment may result in a net loss of revenue to the Government,” Mr Gera said.
In a meeting held recently with Mr Y.G. Parande, Member (Budget), Ministry of Finance, Government of India, a delegation from CREDAI discussed the provisions as presented in the Finance Bill and explained its concerns along with alternative measures.
The CREDAI delegation explained that the proposal of the Government to levy service tax on construction of complexes would give preference to the secondary market of completed projects against projects under construction, thus reducing drastically the capacity of the developers.
CREDAI further questioned the issue of service tax being brought out at a time when the goods and service tax is expected to be introduced in 10 to 12 months. The variability in terms of charging service tax in different parts of the country was another area of concern, the CREDAI representation pointed out.
“CREDAI is concerned about the development of the sector and has thus suggested amendments to the proposals in its present form for the Government’s consideration. With ‘housing for all’ being the common objective for both the Government and CREDAI, we are expecting a positive response from the Government in reconsidering the issues present in the Finance Bill, 2010,” Mr Santosh Rungta, President, CREDAI, said.
The representation was created is consultation with KPMG.