Realtors to meet FM on service tax issue

Seek rollback of proposed service tax

The Confederation of Real Estate Developers’ Association of India (CREDAI) will soon be meeting the finance minister to seek a rollback of the proposed service tax on the real estate sector from April 1, 2010.

“We will be meeting the finance minister in the next few days and will put forth our concerns. I am hopeful there will be at least a partial rollback on the service tax imposed in the Union Budget 2010-11,” Pradeep Jain, president, CREDAI and chairman, Parsvnath Developers said at the sidelines of a conference on the impact of service tax on the real estate sector.

Urban development minister Jaipal Reddy had said yesterday that he would also ask the finance minister to review his decision to bring the real estate sector under the service tax net. Real estate players were unanimous that the extra burden would be passed to the consumer if, indeed, the service tax is imposed.

However, Durgesh Shankar, member, Central Board of Direct Taxes, said, “In my personal opinion, the service tax levied on the real estate sector will stay.”

The association was also critical on the Centre’s decision as land is a state subject. “Service tax on land is unethical, as it is a state subject according to the Constitution of India. So, how can the central government impose tax on it?” asked Jain.