‘Reconsider bringing FSI within the scope of GST’

Developers’ body CREDAI has urged the Centre to reconsider the proposal of charging 18% GST on Floor Space Index (FSI) and additional FSI charges to be paid to local authorities for real estate projects.

This move would have a substantial incremental impact on project costs, further pushing housing prices up by approximately 10% across various parts of the country thus adversely impacting demand, CREDAI said in a letter to Finance Minister Nirmala Sitharaman.

“FSI and additional FSI charges constitute a significant part of the project cost, and the proposal to impose 18% GST on such charges could prove to be counterproductive and act as a deterrent to housing supply and demand, owing to additional financial obligations and increasing housing prices as a direct consequence,” said CREDAI President Boman Irani.

“We strongly request and recommend to the government to keep the FSI charges exempt from GST. Any retrospective or prospective charges could destabilise the financial foundations of numerous projects, hampering the ability to facilitate timely possession by developers,” he added.

Meanwhile, in another development, CREDAI-MCHI, which represents the real estate industry in Mumbai Metropolitan Region (MMR), has entered into a Memorandum of Understanding with Mahatma Phule Renewable Energy and Infrastructure Technology Ltd. (MAHAPREIT) to address air emissions.

“The partnership focuses on evaluating the impact of construction activities on air quality, promoting improved construction techniques, and creating a framework to mitigate the environmental footprint of the sector,” the entity said in a statement.

Domnic Romell, President of CREDAI-MCHI said, “This collaboration underscores our commitment to sustainable development in the construction sector. By working with MAHAPREIT, we aim to set new benchmarks for environmental responsibility and create a robust roadmap for reducing emissions and achieving Net Zero targets.”

Bipin Shrimali, Managing Director, MAHAPREIT said, “The agreement marks a pivotal step toward building a sustainable and eco-conscious construction ecosystem, benefiting both the environment and the wider community.”