Real estate sector likely to come under GST from April 1: Expert

To enhance transparency in property transactions, the GST Council is expected to bring the real estate sector under the purview of the unified indirect tax regime GST from April 1 next, an expert has said.

"It could be introduced from 1st April, and the legislative changes could be done in this (budget) session to facilitate this," CBEC (Central Board of Excise and Customs) ex-Member V. S.

Krishnan told business news channel BTVI in an interview.

Krishnan said the sector can be brought under the GST as a deemed service.

"Land may not be a service, but what you have is right to use land for residential construction... therefore, it can be treated as a service," Krishnan told BTVI.

"What's going to happen is that the whole transaction is going to become transparent... which means what has happened after demonetisation, that process is likely to go forward... in a sense that organised players will welcome."

Krishnan further said that the GST rate imposed on the sector may not be very high "because real estate is linked to affordable housing".

"The government may think of 12 per cent. But 12 per cent may have a backlog with the accumulation of credit... because GST paid on land would also be set off, the GST paid on cement and steel would be set off, and the GST paid in the earlier process of construction services will be set off," Krishnan elaborated.

"So, it may be revenue-neutral in the GST side, but it will clean up the land market, and probably also encourage foreign investors to invest in the real estate sector."

According to sources, the proposal to include the real estate sector under the purview of the unified indirect tax regime is expected to be discussed at the council's meeting to be held in New Delhi on Thursday.

Source- Business Standard

All real estate assets have to be registered with RERA

All real estate projects, agents and building owners have to register their properties with the Real Estate Regulatory Authority (RERA), functioning under the housing and urban development department if they are involved in development and sale of any property or real estate projects. According to the new ruling, the concerned building owners and real estate owners are asked to register their properties as per Tamil Nadu government's Real Estate (Regulation and Development) Rules, 2017, or face either imprisonment or penalty. The rules have been notified in pursuance of the Real Estate (Regulation and Development) Act, 2016, district collector K Rajamani said in a release.

No one should involve in development and sale of any building or real estate project having development or built-up area of 500sqm or where the number of units exceeds eight, without registering with RERA.

The developer of each project has to certify through an affidavit that he has legal title to the land on which the project is being developed free from all encumbrances and the period within which the project will be completed.

The building owners or promoters should mention their registration number got under RERA with their advertisements when they involve in any development and sale of that particular property, the release added.

If any registration had already been done before June 22, 2017, one has to duly apply for exemption with the concerned office. It is mandatory for all the agents working with real estates, the release further said.

Source- The Times of India

NBFCs may see 35% earnings growth

MUMBAI: Non-Banking Finance companies are expected to report as much as 35 percent growth in earnings as retail loans by small and medium enterprises continued at a brisk pace even as state-run lenders continued to hold on to their purse strings due to bad loans. 

Housing finance companies will maintain momentum with the growth coming from the affordable segment. 

A good monsoon, lower income reversal and lower credit cost due to stable asset quality will help vehicle financing report strong traction particularly tractor and commercial.

Consumer finance companies will maintain growth momentum due to pick up in sales in festive season. Microfinance institutions are expected to report softer earnings due to increased provisioning. "Two consecutive years of good monsoon have lifted rural sentiment," said Jefferies in an earnings preview report. Jefferies forecasts 15 per cent loan growth at Shriram Transport Finance and Mahindra and Mahindra Financial Services in the second quarter. 

Our checks suggest home loan disbursal has improved, though growth has varied across regions," said Jefferies in the report. "There has been some pick up in disbursal of affordable housing segment. Stabilisation of regional issues should aid better loan growth at Repco." 

HDFC's disbursement growth is likely to be strong benefitting from various government initiatives on affordable housing. 

Retail inflation rises to 5.21% in December; factory output jumps to 8.4% in November

India’s factory output jumped to 8.4% in November and retail inflation rose to 5.21% in December, confirming the prospects of sustained economic recovery and growing risks of inflation. The Index of Industrial Production was 2.2% in October. The retail inflation, based on Consumer Price Index (CPI), was 4.88% in November. In December 2015, it was 3.41%.

This is the final set of data that finance minister Arun Jaitley will have as he finalises the Budget for 2018-19 to be presented on February 1.According to Bloomberg analysts’ estimate, the IIP will accelerate to 4% in November from 2.2% a month ago, while CPI will cross the 5%-mark at 5.04% in December from 4.88% a month ago. The statistics office last Friday projected the economy to slow to 6.5% in 2017-18 from 7.1% a year ago while maintaining that growth will accelerate to 7% in the second half of the year (October-March) from 6% in the first half (April-September). The economy has been hurt by the lingering impact of demonetization and disruptions caused by GST.

Merchandise exports grew at a six-year high of 30.5% in November while the index for eight core sectors constituting 41% of IIP expanded at its fastest pace in 13 months at 6.8% during the same month. In November, passenger vehicle sales grew at 14.3%, the fastest pace since July, on the back of a low base effect due to the demonetization of high-value banknotes in November 2016.

The Nikkei India manufacturing Purchasing Managers’ Index (PMI) rose at the fastest rate in five years in December to 54.7 from 52.6 in the previous month. A reading above 50 denotes expansion and one below it signals contraction.

Affordable housing: Loans up to Rs 2 lakh see highest NPAs

With a sharp rise in loan disbursements and number of beneficiaries in the affordable housing segment, loans of up to Rs 2 lakh has ended up with the highest level of non-performing assets (NPAs) in home loans. Public sector banks reported higher NPAs in the sub-Rs 2 lakh housing loans slab than housing finance companies in 2016-17 and 2015-16, according to an RBI report on ‘Affordable Housing’.

NPAs for housing loans of up to Rs 2 lakh stood at a whopping 11.9% for PSBs during 2016-17. Housing finance companies also saw a sharp surge in housing loan NPAs in this slab. NPAs went up from 6.1% to 8.6% for the sub-Rs 2 lakh slab between 2015-16 and 2016-17. NPAs stood at 10.4% for this slab. The overall NPAs for housing loans stood at 1.5% and 0.6% respectively for PSBs and housing finance companies during 2016-17. The government’s recent thrust on affordable housing through policy measures that include incentive schemes, accordance of infrastructure tag, interest subsidy scheme under PMAY(Pradhan Mantri Awas Yojana) have resulted in sharp rise in new housing projects in the affordable segment for low income groups. New unit launches in the affordable housing segment registered a 10.1% year-on-year (y-o-y growth in 2016-17. Affordable housing was the only segment in the residential real estate sector that saw a double digit growth. New launches in the mid-range and high-end segments fell by 11.7% y-o-y and 26.7% respectively in 2016-17.

There has been a more than three-fold increase in the number of houses completed under PMAY between April and December 2017. Nearly 2.9 lakh houses have been completed under PMAY as on December 4, 2017, data with the union ministry of housing and urban affairs showed. Investments to the tune of Rs 1.72 lakh have been made under PMAY projects for constructing nearly 32 lakh houses involving a central assistance of Rs 49,537 crore. Of this, central assistance totaling Rs 12,764 crore has already been released.

“From the consumers’ perspective, while availability of low-cost credit is driving the demand for affordable housing, policies like Real Estate Regulatory Authority (RERA) Act may infuse fresh buyer interest in the realty sector,” RBI said. While the joint efforts of the government and the RBI to boost affordable housing have generated positive outcome, a host of factors including lack of suitable low cost land within the city limits, lengthy statutory clearance and approval process, shortcomings in development norms, planning and project design is affecting the pace of affordable housing development, it said.

Source- ET Realty

Budget 2018: Forget hike in exemption limit to Rs 3 lakh, here are 3 better options for FM Jaitley to give tax relief to common man

With the Union Budget 2018 just a couple of weeks away, everybody – including the salaried class – is looking towards Finance Minister Arun Jaitley with much hope. More because this is the last Budget of the Modi government before the 2019 polls and every one is expecting the Budget 2018 to be a populist one, which will help the government woo the masses.

Tax experts say that expectations of the taxpayers from the Union Budgets are always huge. Moreover, this being the last full budget before the elections – the expectation is even higher that this could be a budget for the common man.

For instance, “there is a lot of rumour that the basic exemption limit may be increased from Rs 2.5 lakh to Rs 3 lakh. However, if this is done, this may negatively impact the government’s objective of increasing the tax base. Only 3-4% of the people in India pay taxes and if the exemption limit is increased, this number will fall even further,” says Karan Batra, Founder & CEO of CharteredClub.com.

If this may not be a good step, then how can some sops be given to the taxpayers in the Budget 2018 to reduce their tax burden and give them some relief from the rising inflation and the impact of demonetisation?

1. Change in Tax Slabs

Alternatively, Finance Minister Arun Jaitley may think of changing the tax slabs and the tax rates while keeping the basic exemption limit of Rs 2.5 lakh intact. By doing this, “the government would be able to achieve the twin objective of reducing the tax burden per person while ensuring that the total tax base also increases,” says Batra.

2. Deductibles for children

The Modi government might like to introduce in the Budget 2018 deductibles for the children, who are now adults and wish to take care of their parents. For example, if a scheme was introduced whereby the children could open a retirement savings plan for their parents and claim it as deductible from their taxable income, which would be above the normal Rs 150,000 deduction u/s 80C. “This would encourage more investments to be made, which is beneficial for the government, while the tax deduction would be a welcome relief for the tax payer,” says Chetan Chandak, Head of Tax Research at H&R Block India.

3. Increase in the limits Section 80C deductions, allowances

Finance Minister Arun Jaitley should also focus in the Budget 2018 on increasing the limits of deductions under Section 80C of the Income Tax Act, 1961, as well as several other allowances for salaried employees, which are long due for a revision. For example, the limit of Section 80C deductions may be increased from Rs 150,000 to Rs 200,000. While this will help lower the tax burden of the middle class people to some extent, it will also induce people to invest more in tax-saving schemes, which will boost government revenue and will be a win-win for both. Similarly, there are many allowances whose limits need to be increased in the Budget 2018 as they have become outdated now.

Source- The Financial Express

Canada-India initiative for training of smart city planners

Twenty cities across three Indian states of Punjab, Haryana and Rajasthan are likely to have a fast-track development under a new Indo-Canadian initiative to train smart city planners on capacity-building and governance, according to experts associated with the project.

Under the proposed initiative, a rigorous planning and analysis would be taken up to assess the capacity and investment needs in municipalities, they said.

The 20 cities identified are among the 64 cities in the three states that come under the Atal Mission popularly called AMRUT. The work involves capacity building, reform implementation, water supply, sewerage amongst others.

It is in this context that the Society for Participatory Research in Asia (PRIA) based in India, and Canada-India Centre for Excellence (CICE) at Carleton University is undertaking the initiative to improve the service delivery infrastructure of these cities and thus create opportunities for private investments.

"The joint initiative would leverage Canadian and Indian expertise to address underlying challenges and build downstream receptor capacity," Rajesh Tandon, president of PRIA said.

"The Carleton University and CICE had already carried out considerable work with the Indian Smart Cities Mission. CICE had developed a portal called Smart Cities Navigator to identify market opportunities in India for Canadian investors and companies," Harry Sharma, manager, CICE said.

The proposal aims at training at least 150 official urban planners and designers and builds localised platforms and tools for efficient and predictable planning and execution of "smart cities", they said.

The initiative, researchers said, comes at a time when there are reports that only 7 percent of the Rs 600 crore released by India could be utilised by the municipalities due to lack of governance and capacity building. 

Source- The Tribune