FICCI, ASSOCHAM Push for Input Tax Credit for Real Estate Developers under CGST
Leading industry bodies, FICCI and ASSOCHAM, have strongly advocated for the inclusion of real estate developers in the Input Tax Credit (ITC) scheme under the Central Goods and Services Tax (CGST). This move aims to reduce the financial burden on develop
Real EstateInput Tax CreditCgstFicciAssochamReal EstateFeb 18, 2025
This demand comes as part of a broader push to streamline the tax system and alleviate the financial strain on the real estate sector.
FICCI, established in 1927, is one of the largest and oldest apex business organizations in India.
It serves as a platform for networking, sharing knowledge, and advocating for business interests.
Similarly, ASSOCHAM, founded in 1920, is one of the largest apex industrial organizations in India, representing a wide spectrum of industries across various sectors.
Real estate developers have long been grappling with high operational costs, which are further exacerbated by the current tax structure.
By allowing ITC, these industry bodies argue, the financial burden on developers will be significantly reduced.
This, in turn, is expected to lead to more competitive pricing for properties and a more robust real estate market.
The demand for ITC is particularly significant in the context of the ongoing economic recovery.
The real estate sector, which has been hit hard by the pandemic, can benefit greatly from such a move.
According to industry experts, the allowance of ITC will not only help in reducing the cost of construction but also improve the liquidity position of developers.
The Central Goods and Services Tax (CGST) is a key component of the Goods and Services Tax (GST) framework in India.
It is designed to simplify the tax structure and eliminate the cascading effect of taxes.
However, the current exclusion of real estate developers from the ITC scheme has been a point of contention for the industry.
FICCI and ASSOCHAM have submitted detailed recommendations to the government, outlining the potential benefits of allowing ITC for real estate developers.
These recommendations include a more level playing field for developers, enhanced investment in the sector, and accelerated project completions.
The government is currently reviewing these recommendations and is expected to make a decision in the near future.
If implemented, this change could have a significant positive impact on the real estate sector, fostering growth and stability in a crucial segment of the Indian economy.
In conclusion, the push for ITC for real estate developers is a crucial step towards revitalizing the sector.
It aligns with the broader goal of creating a more supportive and conducive business environment in India, ultimately benefiting both developers and consumers.
Frequently Asked Questions
What is the Input Tax Credit (ITC) and how does it work?
Input Tax Credit (ITC) is a mechanism under the Goods and Services Tax (GST) system that allows businesses to claim credit for the taxes paid on inputs used in the production of goods or services. This helps in reducing the overall tax burden and improves cash flow for businesses.
Why are FICCI and ASSOCHAM advocating for ITC for real estate developers?
FICCI and ASSOCHAM are advocating for ITC for real estate developers to reduce their financial burden, make property more affordable, and boost the real estate sector. This move is expected to improve the liquidity position of developers and stimulate investment in the sector.
What is the current status of ITC for real estate developers under CGST?
Currently, real estate developers are not eligible to claim Input Tax Credit (ITC) under the Central Goods and Services Tax (CGST). However, industry bodies like FICCI and ASSOCHAM are pushing for this to change through their recommendations to the government.
How could the allowance of ITC benefit the real estate sector?
Allowing ITC for real estate developers could lead to reduced construction costs, more competitive property prices, and improved liquidity. This could result in a more robust and stable real estate market, benefiting both developers and consumers.
What is the role of FICCI and ASSOCHAM in this advocacy?
FICCI and ASSOCHAM are leading industry bodies in India that represent various sectors, including real estate. They are actively advocating for the allowance of ITC for real estate developers by submitting detailed recommendations to the government and highlighting the potential benefits of this change.
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