Conference on Service Tax
Le Meridian, New Delhi
27th March,2010
Conference on
REAL ESTATE SECTOR : IMPACT OF SERVICE TAX & OTHER ISSUES AFTER THE 2010 BUDGET
Knowledge Partner :- Deloitte
on 27th March 2010 , Le meridian at 10.00 AM- 04.00 PM, New Delhi
We are happy to inform that CREDAI NCR are organising a Conference on ‘IMPACT OF SERVICE TAX & OTHER ISSUES AFTER THE 2010 BUDGET’ on Saturday 27th March 2010 , Le meridian at 10.00 AM- 04.00 PM, New Delhi . Deloitte is the Knowledge Partner for the Conference.
The real estate sector is the second largest employment generator in India and also positively impacts the development of over 250 other ancillary industries. One of the major problems faced by the real estate sector is the burden of heavy taxes of both the Central and State Governments which have a cascading effect.
Budget 2010 in spite of positives like incentives to hotel business, housing projects, higher allocation under Indira Awas Yojana and other rural development/infrastructure schemes, is unlikely to meet the expectations of the industry primarily due to some of the service tax proposals such as.
Service tax on commercial rentals: The High Court of Delhi in the case of Home Retail Solution and Ors. v. Union of India had clarified that renting of commercial property would not be subject to the levy of service tax. The Budget has amended the scope of ‘Renting of Immovable Property Service’ to directly overrule the High Court judgment and to explicitly cover the activity of mere renting as well and this has been done with retrospective effect from 1st June 2007. Moreover, renting of vacant land where the agreement of contract between lessor and lessee provided for undertaking construction of building/structure on such land for furtherance of business or commerce during the lease period will also be subjected to service tax.
Construction of real estate complexes will now attract service tax, unless the entire consideration for the property is paid after the completion of construction, that is, on obtaining the occupation certificate from the concerned authorities.
Service tax will now also be levied on additional services provided by a builder to buyers for extra charge like preferential location, internal and external development of complexes.
Increase in the standard rate of excise duties to 10% and also on cement, which is a major input for real estate construction.
What it means: Service tax on the activity of construction would primarily mean, buyers paying higher price for property which is under construction.
The expansion of scope of ‘Renting of Immovable Property Service’ is likely to be one of the most controversial proposals. Pursuant to the Delhi High Court judgment, most industry players refrained from paying service tax pursuant to such transactions. This amendment would have a significant impact on both the real estate sector as also sectors which rely on lease of immovable property for running their business. Further, retrospective nature of the amendment will now result in an adverse impact on the sector and may lead rise to a large amount of litigation.
In an industry where agreement of contract between lessor and lessee providing for construction of building/structure on vacant lands are a common phenomenon, an imposition of service tax on such transactions is not likely to go down too well with the real estate sector.
The increase in the standard rate of excise duty and increase in duty of cement and petroleum products will increase the cost of construction and it is expected that per unit cost for prospective buyers will also increase. But, the industry may also have to bear the pinch of such increase in excise duties, as at present, when the demand is on a slow recovery path, it may not be able to pass on the entire increase in the cost of construction to the buyers.
Eminent professionals and experts from the real estate sector shall be addressing the participants at the Conference.
Representatives of real estate companies, allied industries, developers, builders and promoters, consultants, professionals, financial companies / institutions, etc. are invited to join the Conference and avail of the excellent opportunity it will provide to learn about and clarify doubts on all tax issues faced by the real estate sector.
The Conference will allow you to (1) learn from the best, (2) benefit from the unrivalled networking, (3) extend your knowledge, and (4) address important issues faced by the real estate sector. To partly defray the cost, a participation fee of Rs. 2,500/- per delegate from members of CREDAI / CREDAI NCR and Rs. 3,500 per delegate from non-members is being charged. More than three members from the same company will going to have 15% discount .
Please confirm your participation and register for the Conference by sending the delegation fees to the Conference Secretariat with the requisite participation fee at the earliest.
Some of the eminent Speaker are as follows :-
Shri Durgesh Shankar Member ( R ) GOI
Sh Upender Gupta, Additional Commissioner , Service Tax
Shri. Pradeep Jain, Chairman, Parsvnath Developers Ltd, President, CREDAI NCR
Shri Sachin Sandhir , Managing Director and Country Head , RICS
Shri Atul Gupta , Sr. Director , Deloitte Haskins & Sells .
Sh Vivek Kohli , Senior Partner , Zeus Law Associates
Shri Getamber Anand , MD , ATS INFRASTRUCTURE LTD, VP CREDAI
Shri Sunil Agarwal , Chief Development & Acquisitions Officer , SARE
Shri Rohit Raj Modi , Director, Aashiana Homes (P) Ltd , Hony. Secretary CREDAI NCR
