Mumbai : The National Real Estate Development Council in association with Grant Thornton India LLP, a leading assurance, tax and advisory firm, organised a Workshop on “Tax and accounting developments in India’s real estate sector.” This event marked the entry of NARDECO in Mumbai and focused on the recent measures for fair accounting and taxation.

Addressed by eminent speakers such as Sunil Mantri, Vice President, NARDECO, Suneel Sehgal, DDG, NARDECO, Khushroo Panthaky, Partner, Walker Chandiok & Co., Neeraj Sharma, Partner, Walker Chandiok & Co., Vishwas Panjiar, Director, Walker Chandiok & Co. and Amit Sarkar, Director Grant Thornton India LLP, the session threw light upon issues related to taxation policies undertaken at the Union Budget 2013-2014 and reviewed the same under the umbrella of Direct and Indirect tax laws.

The session addressed topics such as; re-introduction of withholding implications where property is transferred, the concept of transfer of immovable property at Fair Value also made applicable in case of stock transfers, transfer of Immovable property without adequate consideration is subject to tax, introduction of TDS on transactions of immovable properties value in excess of Rs. 50 lakh, challenges in indirect tax – lessor abatement in service tax on residential units having carpet area above 2,000 square feet and additional pertinent issues in income tax.

Addressing the audience during his opening speech Sunil Mantri, VP NARDECO said, “The objective of the Budget 2013-2014 is to reduce tax evasion. However, the bigger question is to have a tax policy which encourages compliance and at the same time maintains a reasonable rate of taxation, keeping in view the direct and indirect linkages of real estate in India’s economy.”

Neeraj Sharma, Partner, Walker Chandiok & Co speaking about the real estate guidance note said, “The earlier guidance note on real estate accounting was quite generic in nature and was not able to address the ever changing dynamics of real estate transactions. The revised guidance note which is applicable for all projects commenced after 01 April 2012 is quite comprehensive in nature and covers all forms of real estate transactions. This revised guidance note will bring in uniformity in the way the real estate transactions are accounted and ensure comparability of financial statements from the perspective of all the stakeholders.”

Amit Sarkar, Director, Indirect Taxation at Grant Thornton India LLP  mentioned, “Considering the strategic importance of the Real Estate Sector for growth of the Indian Economy, it may be pertinent for the Tax policymakers to award concessions against non-creditable input taxes that significant increase overall costs for the Sector.  Such concessions may be provided by permitting composition rates of indirect taxes (particularly VAT and Service tax) to be made available without any input tax credit restrictions as prevalent today.”

The session closed with an understanding that the rapid growth of the real estate industry also meant that there has to be an increase in regulations and rigour. Moreover, there is a need to escalate certain issues to the regulatory board in order to attain clarity and bring about a positive change that could benefit both the regulators and the real estate industry.

Source : Sachin Murdeshwar