Imposing GST on FSI charges could increase housing prices by 10%, adversely impact demand: Developers
December 21, 2024
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Developers said that such additional charges will make affordable housing projects economically unviable, potentially pushing the prices upwards by 7-10 percent and directly impacting the purchasing power of the middle-class segment
Real estate developers across the country have urged the central government to reconsider the proposal of bringing FSI (floor space index) and additional FSI charges within the scope of Goods and Services Tax (GST), as the move may trigger an increase in property prices.
The Confederation of Real Estate Developers Associations of India (CREDAI), in a letter addressed to the Finance Minister Nirmala Sitharaman, on December 20 urged the Centre to reconsider the proposition of charging 18 percent GST on FSI/ Additional FSI charges paid to local authorities for real estate projects.
According to CREDAI, this move would have a substantial incremental impact on project costs, further pushing housing prices up by approximately 10 percent across various parts of the country.
Imposing GST on these charges would also affect not just housing demand but also supply as it would raise significant economic and viability concerns.
The move comes after reports that the GST Council is expected to decide on implementing 18 percent GST on FSI and additional FSI charges. The decision is likely to be taken in the upcoming GST Council meeting on December 21 in Jaisalmer, Rajasthan.
Source: www.moneycontrol.com
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