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 Relaxation of regulatory deadlines by FM step in the right direction, say developers

Builders hope the economic package to be announced soon would aim at bringing in much-needed liquidity into the system during COVID times

The real estate sector has welcomed finance minister Nirmala Sitharaman's announcements with regard to relaxations on the regulatory deadlines, saying that this would enable them to focus on continuity and contingency plans to address the COVID crisis but hope the cash flow issues are addressed in the economic package to be announced soon.

"The government is successful in battling two wars simultaneously, while it is taking all possible steps to break Covid-19 contamination chain, on the other hand, it has ensured taxpayers and companies do not face hardships due to the challenges that have emerged. We welcome relaxation and deadline extensions. We hope, the government announces similar measures to relax repayment towards mortgages, home loan EMIs apart from coming up with Income Tax and GST holiday for the affected financial years," said Shailesh Puranik, Managing Director, Puranik Builders.

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Real estate developers have been provided relief by way of extension in the dates of filing income tax returns which has been extended to June from March with lowering of the interest rates to be charged. Even the date of filing GST returns has been extended.

"This is a big relief to developers as these would provide them more time for meeting various regulatory compliances at all levels. This will enable developers to focus on continuity and contingency plans to address the COVID crisis rather than focus on statutory regulations and compliance issues such as filing income tax returns, GST and TDS. This will be followed by an economic package aimed at bringing in liquidity into the system. This should as short-term measures include declaring COVID a ‘force majeure’ situation and look at deferring interest and principal repayments at least for six months. As for long term measures, the government should look at reduction in stamp duties and revision of circle rates to align them with the prevailing market rates," said Samantak Das, Chief Economist and Head of Research & REIS, JLL India.

Concurs Anckur Srivasttava of GenReal Advisers. These steps clearly indicate that the government is not oblivious to the pain that the real estate sector is currently undergoing on account of COVID-19 and has taken cognizance to the need for financial restructuring and compliance leniency.

"But there is a need for real cashflow management situation that every real estate operative is facing," he said.

The sector is hoping that the economic package would include the ongoing situation to be declared as 'force majeure', a potential reduction in interest rates to ease debt burden that would look at providing atleast a two to three month moratorium on all ongoing debt repayment without there being adverse impact on asset reporting guidelines, he said.

"A positive step indeed, with a broader economic package to be announced. The Finance Minister has made a slew of announcements, which largely defer mandatory filing dates in most instances from 31 March to 30 June 2020. This rescheduling of regulatory compliances is much appreciated to combat the current statutory dues,” said Niranjan Hiranandani – President – ASSOCHAM and NAREDCO.

"The Finance Minister's announcement today to defer the GST filing for March, April and May till 31st June, 2020, among other measures, comes as a relief for Indian Real Estate and is a step in the right direction. However, the economy is currently longing for a more concrete and decisive plan of action that will combat Covid – 19’s adverse implications. We are hopeful and confident that the Economic Task Force will soon announce measures in this regard," said Nayan Shah, President, CREDAI MCHI.

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First Published on Mar 24, 2020 10:43 pm
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