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GST: FinMin asks builders to pass benefits to buyers

The refunds given on taxes for inputs should lead to price reductions in the sector: FM Arun Jaitley

Indivjal Dhasmana & K Raghavendra Kamath  |  New Delhi/Mumbai 

Defence Minister, Arun Jaitley, Jaitley, NDA government
Photo: Dalip Kumar

The on Sunday said developers should pass on any reduction in prices of under-construction houses (due to input tax credits) to buyers after the goods and services tax (GST) is 
introduced next month. 
It has asked the housing department to communicate to states for action against any forcing by builders on buyers of such houses to pay the full amount before July 1, on the pretext of “This is wrong,” Finance Minister told reporters when they said builders were apparently doing this, despite a clarification by his on Thursday. 
He said the refunds given on taxes for inputs should lead to price reductions in the sector. “The entire 
price reduction should not be pocketed by developers,” he said. The statement came on a day when the Council approved anti-profiteering measures. 
“We have also requested the secretary to communicate to states in this regard,” said revenue secretary Hasmukh Adhia. Praveen Jain, president at NAREDCO, an industry body of real estate developers: “Developers should charge at today’s rates not at rates. I feel there is more impact in high-end properties.”
Rajan Bandelkar, vice-president, National Real Estate Development Council (NAREDCO), West said that buyers pay as per progress of construction. “They do not pay in advance,” he said.
The Council had brought the realty sector under partially through works contracts. These will be taxed at 12 per cent under the new indirect tax regime. 
The (CBEC) had earlier said that it and the states had got complaints that in view of this tax, people who’d booked flats and made part-payment were being asked to deposit the entire amount for the house before July 1. Or, they were being told, they’d face a higher tax for payment made after July 1. CBEC warned that this was against the law. 
Meanwhile, industry body Confederation of Indian Industry on Sunday said India Inc was ready for the implementation from July 1, as the new indirect tax regime will contribute significantly towards economic growth, job creation and exports expansion.