CREDAI wants loan restructuring, lower GST, dedicated fund for stalled housing projects

Faced with liquidity crunch, realtors' apex body CREDAI Thursday sought one-time restructuring of loans provided to the sector as well as a dedicated fund for the completion of stalled housing projects.

It also demanded reduction in the GST rate for under-construction homes at 8 per cent from the current 12 per cent, besides single-window clearance for projects.

These demands were made by the association at it's second edition of the New India Summit in Mysore, Karnataka. Over 1000-member developers and experts from the real estate sector from across the country attended the event. The summit was inaugurated by Union Minister of Skill Development and Entrepreneurship Ananth Kumar Hegde.

"In view of real estate being subject to both GST and stamp duties, there is a case that the rate of GST on real estate, which stands at 12 per cent, needs to be reduced to 8 per cent across all segments and not just for houses of up to 60 square metres," CREDAI said in a statement.

The current land abatement rate of 33 per cent is also not adequate in case of metros where land costs up to 70 per cent of the total cost of the unit, it added.

CREDAI pointed out that lack of implementation of single window clearance in Indian realty space is a major reason for delay in projects. The fast track approval will resolve critical operational issues in the industry and could also reduce real estate prices substantially.

On liquidity crunch, Credai said: "Demonetisation, Real Estate Regulation Act and GST have cast the heavy burden of multiple transitions on the real estate sector. The NBFC crisis has resulted in a liquidity crunch for the Indian real estate sector with even loans that have been sanctioned facing difficulties in disbursement."