By IANS,
New Delhi : The urban development ministry will ask the finance ministry to review a proposal to impose service tax on under-construction properties as it may lead to a rise in real estate prices.
“The finance ministry should review the proposal of service tax. The (real estate) sector is not in the pink of health. We will send our recommendations to them in few days,” Minister S. Jaipal Reddy said on the sidelines of a conference on Indian real estate organised by the industry lobby Assocham.
Finance Minister Pranab Mukherjee in Budget 2010-11 proposed to bring development of real estate complexes under the ambit of service tax.
Realty experts say such a tax may lead to 3.4-3.5 percent rise in costs for buyers.
Reddy said a real estate regulator for Delhi would be in place this year.
“The draft regulatory will be passed in 2010,” said Reddy.