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Apartments to cost the earthnews |
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| 28 February 2005 |
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Chennai: Doling out peanuts on the one hand and grabbing a larger chunk with the other seems to be the strategy of union finance minister P Chidambaram. While exempting some services, the minister tries to more than compensate the loss by bringing in builders under the service tax net.
In his budget proposals, the minister has sought to bring in builders promoting apartment complexes with 12 or more flats. The proposal would obviously hit flat buyers hard.
It is common knowledge that most of the residential buildings do not have fewer than 12 flats except for luxury or premium apartments. And in metros, a flat costs nothing less that Rs10 lakh, excluding registration charges.
If the buyer has to pay another 10.2 per cent or Rs1.02 lakh as service tax, then housing will surely become that much more difficult to afford for those who had scraped together the cost of the flat. It should be noted that interest rates on housing loans have lately been on the upswing now.
"The service tax of on builders in metro cities would definitely increase the cost of apartments for everyone, which may not be a step in right direction, particularly when all efforts should be made to provide homes to all," says Anil Singhvi, executive director, Gujarat Ambuja Cements Limited.
Another proposal that increases the building cost is the increase in excise duty on clinker to Rs350 per tonne as the cement manufacturers will pass on the hike to the end user.
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