The Hindu 24.12.2010
Builders for rationalisation of tax system
KURNOOL: Confederation of Real Estate Developers Association of India (CREDAI) urged the government to rationalise tax system affecting builders, property developers and property purchasers.
P. Ranganath Reddy, secretary of Kurnool branch of the association, who was among the delegation at the national conference at New Delhi recently, said the builders representatives expressed unhappiness over multiple taxation on the construction industry.
The builders pay a tax of 11 per cent on purchase of land and the same property attracts another 11 per cent tax when structures are transferred to the customers. In fact, the second spell of registration charges also includes the land cost leading to double taxation.
The builders asked for single point taxation at the time of approval of building plan and exclusion of land cost for the second spell of registration. The builders pay service tax, VAT and Labour cess at different places which could be credited at a single point. The Central government is understood to have considered the plea for tax rationalisation valid.
The government too agreed to the view that the infrastructure and realty would drive the economy in the coming decade leading to creation of huge employment and business in view of the urbanisation of the country.
A study conducted by an agency instituted by the government noted that 590 million people would be living in urban India by 2030 and the size of urban middle class would increase to 91 million from the present 22 million. The government asked the association to explore the possibilities of widening the public and private partnership platform.
Also, the builders requested the government to streamline the ways for transfer of technology from the Building Materials and Technology Promotion Council as the private sector is willing to adopt the technology.
Mr. Ranganath Reddy said in tune with the national trends, the migration to Kurnool city from rural areas is heavy. The rental values went up several times indicating shortage of housing in the city.
