Naidu for service tax exemption to low cost housing

Union Urban Development and Housing Minister M Venkaiah Naidu on Monday suggested for exempting affordable housing from service tax under the Goods and Services Tax (GST) regime.

Addressing real estate body CREDAI event here, the minister also asked the states to waive stamp duty for low cost housing projects. “At present, affordable housing is exempt from service tax. The housing ministry has already taken up with the ministry of finance the need to continue with this exemption under the GST,” Naidu said.

With the infrastructure status granted to affordable housing in the Budget, this will act as catalyst for the development of such projects, he added,

Naidu said the ministry has also recommended that the real estate sector should be taxed at a rate “which is revenue neutral and not at a higher tax rate”.

The minister said although there is no clarity on the inclusion of real estate within the ambit of GST, the real estate sector would be benefited from this big reform ‘One Nation One Tax’.

Last week, the GST Council approved draft of key supporting legislations to enable rollout of the new indirect tax regime from July 1.

The minister also asked real estate developers to ensure timely delivery of projects, as the country is gearing up for implementation of Real Estate Regulatory Act.