By Pavitra Shankar
Rising input costs, have been a concern for the real estate sector. For one, cement which is a vital raw material currently attracts GST of 28% which is the rate at which luxury items are taxed. A reduction in GST for cement would be a welcome announcement for the sector. Additionally, the reinstatement of Input Tax Credit by the Government would be a welcome move as it would ease the burden on real-estate developers and enable more efficient pricing for the end consumer.
An extension on the time frame to around 7 years for completion of affordable housing from the current 5 years from the date of sanction will give the much-required impetus to developers. The hospitality and tourism sectors have been the worst hit during this pandemic. Industry status to the hospitality sector along with a reduction in GST rates for hotels and restaurants will help boost travel and tourism. Infrastructure status for commercial developments, GST input credit and tax benefits for data centre developments, keeping in view the opportunities and requirements, would greatly help the commercial sector.
The Government should consider setting up a corpus to invest in startups that add value to the real estate sector, with a special focus on sustainability. The Government should also incentivise the growth of startups in the proptech space through public-private-partnerships by setting up incubators focussed on proptech.
(The author is the Executive Director of Brigade Enterprises Ltd.)