Budget 2017-18: REMI reactions on Jaitley’s speech in Lok Sabha

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NEW DELHI (INDIA): The Real Estate Management Institute (REMI) Business head Shubika Bilkha said that the Budget 2017 as announced by the Finance Minister Arun Jaitley is a largely populous budget premised on an increase in capital expenditure across a number of key categories.

“The real estate and infrastructure sector has seen a favourable outcome across this budget. This is essential to improve the sentiment across these sectors. The budget provides a boost to the infrastructure sector with a significant increase in integrated capital expenditure,” said Bilkha.

“Additionally, with the premise to deliver 1 lakh rural homes and promote the affordable housing sector to infrastructure status, as well as revise the affordable housing definition to a carpet area of 30 sq m and 60 sq m, the budget gets us a step closer to deliver the Housing for All agenda. Additionally, with a large number of developments taking place through the JDA scheme, taxation on the year of completion is an added relief to the real estate sector,” she said.

“The reduction in long term capital gains from 3 years to 2 years with 2001 as a base year of indexation could be viewed as a step towards enhancing the secondary market. The Budget has implied a number of measures that could potentially increase job creation and increase the money in the hands of the consumer through lower tax rates in certain income bands, which could positively impact the overall buyer sentiment in the real estate sector. The Budget has confirmed the roll out of the GST but however has refrained from touching on the multiple taxation under REITs that could provide an additional funding avenue for developers focused on the middle and premium ends of the spectrum,”said Bilkha.

Affordable Housing will be given Infrastructure Status

The Union Minister for Finance and Corporate Affairs, Arun Jaitley while presenting the General Budget 2017-18 in Parliament said that affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits.

The National Housing Bank (NHB) will refinance individual housing loans of about Rs. 20,000 crore in 2017-18. Thanks to the surplus liquidity created by demonetisation, the Banks have already started reducing their lending rates, including those for housing. The Finance Minister Shri Jaitley in his Budget Speech said that in addition, interest subvention for housing loans has also been announced by the Prime Minister Narendra Modi.

GST Council has finalised its recommendations on almost all the issues based on consensus

The Union Minister for Finance and Corporate Affairs,Jaitley said that the GST Council has finalised its recommendations on almost all the issues based on consensus after spirited debate and discussions.

The Finance Minister said that the Government on its part has promptly given effect to various provisions of the Constitutional Amendment Act, including constitution of the GST Council.

The GST Council held 9 meetings to discuss various issues relating to GST, including broad contours of the GST rate structure, threshold exemption and parameters for composition scheme, details for compensation to States due to implementation of GST, examination of draft model GST law, draft IGST law and the Compensation Law and administrative mechanism for GST.

He said the preparation of IT system for GST is also on schedule.

The Finance Minister Jaitley in his Budget Speech further said that the extensive reach-out efforts to trade and industry for GST will start from 1st April, 2017 to make them aware of the new taxation system.

He said that since the enactment of the Constitution (One Hundred and First Amendment) Act, 2016, there has been substantial progress on preparatory work towards ushering in GST which is by far the biggest tax reform since Independence.

“Several teams of officers both from the States and Central Board of Excise and Customs (CBEC)have been working to give finishing touch to the Model GST law, rules and other details, he added.

Jaitley said that the Government, through the Central Board of Excise & Customs (CBEC) shall continue to strive to achieve the goal of implementation of GST as per schedule without compromising the spirit of co-operative federalism.

He added that the implementation of GST is likely to bring more taxes both to Central and State Governments because of widening of tax net.

The Finance Minister Jaitley stated that not many changes have been proposed in current regime of Excise & Service Tax in the Budget proposals since they are to be replaced by GST soon.