Reduce service tax for real estate: Vakil Housing

By M A Vakil

CMD, Vakil Housing Development Corporation, Bangalore

Real estate industry is the second largest provider of employment after agriculture in India.  Further, Real estate is universally acknowledged as the primary trigger of economic activity.  Each rupee spent in housing generates more employment and economic activity than any other industry.  We urge the FM to recognize this and accord the same consideration and treatment as other industries like software.  Specifically,

• We support the demand of our national association, the Confederation of Real Estate Developers' Association of India (CREDAI), which  has demanded from government to reconsider various sections like 80-IB(10) of the Income Tax Act. CREDAI  have also asked the government to step down various levels of taxation at Centre and State governments
• Reduction of service tax along with the modification of entire income tax structure for real estate industry
• The Real industry has matured significantly in the last few years.  Hence the Government should seriously consider introduction of  sectoral concepts such as rental housing, and real estate investment trusts (REITs) in order to allow housing more easy and affordable for common man along with raising more funds.  Such developments proved their worth in number of other industries.

Further, in put costs like steel, cement etc., has risen dramatically in the last two years, which seems to indicate a strong cartelization of suppliers. The Tamil Nadu CM has actually warned the cement industry on this issue and demanded a probe by central agencies.  Since these costs impact on all sectors of the economy and directly contribute to the inflationary trends, we would urge the Central Government to ensure that the supplies of such critical raw materials are available at reasonable prices.