Maharashtra Real Estate Sector Will Benefit From Sales Tax Amnesty Scheme

While presenting Maharashtra State Budget 2022-23 in the Assembly, Maharashtra Finance Minister and Deputy Chief Minister Ajit Pawar said that the state will be the first to have a $1-trillion economy. Among the highlights included the revenue deficit budget while announcing an Amnesty Scheme for Goods and Services Tax (GST) payees and a reduction of VAT on natural gas, among other tax concessions. This move has been lauded by those in the real estate sector as these were some of the suggestions that were presented in the past year by the industry with the objective to foster the growth of the industry.

Sandeep Runwal, President, NAREDCO Maharashtra and Managing Director, Runwal Group welcomes the government announcement of the Amnesty Scheme under the Stamp Duty Act as it will be applicable for pending penalties. He adds, “It will encourage people to come forward and pay the pending dues,  which in turn will help increase the tax collection. Similarly, the proposal to waiver the Stamp Duty of 0.1 percent on gold and silver imported in Maharashtra is a welcome move, too. As it will have a direct and indirect impact on the real estate sector.”

The State Budget is believed to be forward-looking as it focuses on a long-term plan for the state. It will pave the way for a sustainable and prosperous Maharashtra by putting five aspects into action: agriculture, health, infrastructure, transportation, and industry.

The real estate sector has been ailing for a long time and the state government has been taking several proactive measures to boost the real estate sector in the state. For instance, Maharashtra was one of the first states to announce the reduction in stamp duty during the COVID-19 period, which led to a phenomenal increase in sales of unsold inventory in the state of Maharashtra.

Pritam Chivukula, Treasurer, CREDAI MCHI and Co-Founder and Director, Tridhaatu Realty says that State Budget 2022-23 is the need of the hour to boost the real sector in the state. “Real estate has direct and indirect 125 allied industries depending on it, like steel and cement among others. By coming out with these measures the State Government of Maharashtra is indirectly helping those 125 allied industries as well,” he elaborated.  “Real estate is one of the second largest employment generators in the country and contributes around 7 percent to the GDP. Therefore, the announcements made by the State Government this year are most welcome. In fact, it is the need of the hour,” he concurred.

Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory said, “The Maharashtra Budget 2022 impetus on infrastructure was much needed for a state which is aiming to emerge as a $1 trillion economy. The Amnesty Scheme is a welcome move and I have strong reasons to believe that this will help to keep investor sentiments intact in the state.

The decision to increase the time period in which stamp duty paid on the earlier deed to be adjusted against subsequent deed from one year to three years will incentivise construction business. While stamp duty exemption on gift deed to the government institutions and local corporations will really help to streamline various bottlenecks associated with land transfer in metro pockets.  In a nutshell, the Budget promises great optimism for the state and hopefully that will transpire some momentum for real estate development in Maharashtra.”

“However, the whole real estate fraternity would be disappointed without any concrete decision on the proposed metro cess. We were expecting the Budget would announce a deferment on the upcoming 1 percent metro cess. In fact, one year of deferment would have helped the real estate sector to keep home buyers’ sentiments positive in the market. At this point in time, we really can’t afford any negative customer sentiments, especially after the system reboot through various structural reforms and pandemic-inflicted slowdown on the back of rising construction cost.” Mr. Agarwal further added.