The land abatement rate of 33 per cent needs to be increased for Tier-I cities, says Jaxay Shah, President, CREDAI National

Says Jaxay Shah, President, CREDAI National: The Goods and Services Tax has been the biggest tax reform in India since independence and has greatly encouraged ease of doing business in the country. The real estate sector currently faces an effective rate of 12 per cent while the government has brought down the GST rate to 8 per cent for houses up to 60 sq m. The stamp duty rate of 5-8 per cent, however, leads to a cascading effect and cost escalation which should be abolished or reduced drastically. The land abatement rate of 33 per cent also needs to be increased for Tier-I cities where the cost of land is extremely high. Furthermore, Transfer of rights and Joint development agreements were not subject to service tax before. They are in the nature of immovable property. Hence, they should not be subjected to GST.