Sat Dec 21 15:26:24 UTC 2024: ## Proposed GST on Real Estate Sparks Concerns Over Affordable Housing in India

**Visakhapatnam, December 21, 2024** – The Confederation of Real Estate Developers’ Associations of India (CREDAI) has voiced strong opposition to the government’s proposed 18% Goods and Services Tax (GST) on Floor Space Index (FSI) premiums. The organization warns this move, set for discussion at the upcoming GST Council meeting, will significantly increase housing costs and hinder the government’s affordable housing initiatives.

CREDAI officials, including national president Boman Irani and Visakhapatnam chapter leaders, argue that the inability to claim Input Tax Credit (ITC) on construction materials and FSI premiums will create a double burden on developers and ultimately buyers. This, they predict, could inflate property prices by 7-10%, making homeownership increasingly unaffordable for middle-class families.

In a letter to Finance Minister Nirmala Sitharaman and other key officials, CREDAI highlighted the potential negative impact on the real estate sector, a major contributor to India’s GDP and employment. They urged the government to reconsider the proposal, suggesting alternatives such as reclassifying FSI premiums, allowing ITC claims, applying future GST clarifications prospectively, and exempting affordable housing projects under PMAY from the tax.

The organization emphasizes that imposing additional taxes on housing development, especially without ITC, is counterproductive and risks jeopardizing the accessibility of affordable housing for millions of Indians. The real estate industry is now anxiously awaiting the GST Council’s decision, the outcome of which will have far-reaching implications for the future of housing affordability in the country.

Read More