Fri Dec 20 19:01:00 UTC 2024: ## CREDAI Urges Government to Reconsider 18% GST on Real Estate FSI Charges

**Chennai, December 21, 2024** – The Confederation of Real Estate Developers’ Associations of India (CREDAI) has called on the Union Finance Minister to reconsider the proposed 18% Goods and Services Tax (GST) on Floor Space Index (FSI) and additional FSI charges for real estate projects. In a letter to the minister, CREDAI warned that this move would significantly increase housing costs, potentially by 7-10%, impacting affordability and market viability.

CREDAI argues that imposing GST, whether retrospectively or prospectively, would add substantial financial burdens to developers, impacting both ongoing and completed projects. This could lead to project delays, financial instability for developers, and jeopardize homebuyers’ investments. The organization highlighted that the real estate industry is already grappling with rising raw material costs, and this additional tax would make affordable housing projects economically unviable.

CREDAI President Boman Irani stated that the proposed GST on FSI charges is counterproductive, hindering both supply and demand in the housing market. He emphasized the importance of exempting FSI charges from GST to maintain the financial stability of numerous projects and ensure timely delivery of homes to buyers. The inability to claim Input Tax Credit (ITC) on GST further exacerbates the issue, resulting in what CREDAI terms “double taxation.” The organization stressed that the impact would disproportionately affect the middle class, who comprise 70% of homebuyers.

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