Service tax cuts to help realty
The real estate industry is not enthused by the cut in duty on bulk cement from 10% to 8%. However , the cut in service tax rate from 12% to 10% will benefit those who have taken large commercial properties on rent.
By TNN |
NEW DELHI: The real estate industry is not enthused by the cut in duty on bulk cement from 10% to 8%. However , the cut in service tax rate from 12% to 10% will benefit those who have taken large commercial properties on rent.
Gera Developments CMD Kumar Gera said the reduction of 2% will have no impact at all. ���It will make a difference of just Re 1 per square foot on the cost of construction . It is irrelevant and means nothing for the industry,������ Gera said.
Real estate consultant Ashok Narang too felt that the reduction on bulk cement duty would make no difference on real estate. ���The market will kickstart only when banks bring down interest rates to about 7% for a longer period. This cut in duty is just an eyewash. There need to be more incentives for the housing sector.������
The head of a large real estate company said the cut in service tax will benefit those who are on rent in large commercial complexes. ���For example, someone paying Rs 1 crore as rent annually for an office space. Earlier, he would have paid Rs 12 lakh as service tax. Now he would save Rs 2 lakh annually since under the new rate his service tax outgo will be Rs 10 lakh,������ said the official.
However, industry players feel the government decision could have a positive impact on people���s sentiment . Property redeveloper Pujit Agarwal said that at a time when market sentiments are low, any kind of incentive is helpful, however small. ���The duty cuty will bring down the cost of construction by just 1.5%. It is not much, but nevertheless a breather for the industry. The government wants to show it is being proactive,������ he said.
South Mumbai developer R C Chaturvedi said a cement bag currently costs Rs 260. ���With this reduction the saving per bag will be just 1.2%. This will not make much difference on the cost of construction ,������ he added. Developer Sunil Mantri of Mantri Realty said a cement bag will now be cheaper by Rs 5 to Rs 7. ���Its a good step by the government, although a small one,������ he observed.
Gera Developments CMD Kumar Gera said the reduction of 2% will have no impact at all. ���It will make a difference of just Re 1 per square foot on the cost of construction . It is irrelevant and means nothing for the industry,������ Gera said.
Real estate consultant Ashok Narang too felt that the reduction on bulk cement duty would make no difference on real estate. ���The market will kickstart only when banks bring down interest rates to about 7% for a longer period. This cut in duty is just an eyewash. There need to be more incentives for the housing sector.������
The head of a large real estate company said the cut in service tax will benefit those who are on rent in large commercial complexes. ���For example, someone paying Rs 1 crore as rent annually for an office space. Earlier, he would have paid Rs 12 lakh as service tax. Now he would save Rs 2 lakh annually since under the new rate his service tax outgo will be Rs 10 lakh,������ said the official.
However, industry players feel the government decision could have a positive impact on people���s sentiment . Property redeveloper Pujit Agarwal said that at a time when market sentiments are low, any kind of incentive is helpful, however small. ���The duty cuty will bring down the cost of construction by just 1.5%. It is not much, but nevertheless a breather for the industry. The government wants to show it is being proactive,������ he said.
South Mumbai developer R C Chaturvedi said a cement bag currently costs Rs 260. ���With this reduction the saving per bag will be just 1.2%. This will not make much difference on the cost of construction ,������ he added. Developer Sunil Mantri of Mantri Realty said a cement bag will now be cheaper by Rs 5 to Rs 7. ���Its a good step by the government, although a small one,������ he observed.
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Developer Pravin Doshi, who is also the president of the Maharashtra Chamber of Housing Industry , however, observed that this will make a difference on big projects . ���It will help a lot. The cost of construction will reduce by at least 7% to 8%. It is a good decision.������ Download
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