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Union development ministry against service tax on real estate: Jaipal Reddy

By A Staff Reporter

The Union Urban Development Ministry would shortly seek withdrawal of service tax imposed on real estate sector by the Union Finance Minister in his Budget proposals for 2010-2011 as the sector is still in pink, says the Union Minister of Urban Development, Mr. Jaipal Reddy.

Inaugurating ASSOCHAM organised National Conference on the Indian real estate in the Capital recently, Mr. Reddy said that his ministry would make a detailed representation to the finance minister, Mr. Pranab Mukherjee, in next few days seeking review of the service tax on the real estate sector.

Responding to a query raised by the past president, ASSOCHAM, Mr. K.P. Singh, who also heads the DLF group of industries on issue for review of service tax, the minister responded in the affirmative and argued that service tax on real estate can wait as it is not yet come out of recession.

On the issue of real estate regulator for Delhi, Mr. Reddy said that it would be in place latest by 2010 as process for its legislation would shortly be completed since the draft Bill is already circulated to the concerned stakeholders and it would become an Act in the current year itself since it has already been delayed inordinately. On the issue of the Regulatory Bill, the minister was categorical that it would completely eliminate night operators from the real estate sector as also to prevent the sector from indulging into unnecessary profiteering.

Mr. Reddy also said that as far as Delhi is concerned, the Ministry of Urban Development would allow vertical development of real estate dwellings in older areas and remaining sprawl of Delhi provided the Municipal Corporation and Delhi Government assures availability of all basic amenities such as water, power for its vertical development.

In this connection, the minister announced that the Ministry of Urban Development would shortly come out with new relaxed Floor Area Ratio (FAR) regime without specifying any time frame for it.

Mr. Reddy also disclosed that his Ministry was in concerted and protracted discussions with bodies like Delhi Development Authority to develop zones to effectively execute Delhi master plan so that the national capital becomes a role model for other states to be emulated.

In his welcome speech Mr. K.P. Singh, Past President, ASSOCHAM and owner of DLF, blamed the Governments for neglecting plan urban development of mega cities like Delhi and accused bureaucracy and policy makers for faulty planning as a result infrastructure and civic amenities of metros have started crumbling.

He sought to rectify the mistakes of the past by replacing officers of All India Services from Urban Development Regulatory agencies with technocrats who can make better planning based on which urban facilities are put up that can last for centuries.