Real Estate Industry in Maharashtra Will Profit From A Forward Thinking Sales Tax Amnesty Plan

The recently announced state budget is considered forward-looking since it is centred on a long-term vision for the state.

Ajit Pawar, Maharashtra Finance Minister and Deputy Chief Minister, said during the presentation of the Maharashtra State Budget 2022-23 in the Assembly that the state would be the first to achieve a $1 trillion GDP. Among the highlights were the revenue shortfall budget, which featured an Amnesty Scheme for GST payers and a cut in the VAT on natural gas, among other tax reductions. This decision has been welcomed by many in the real estate business, since these were some of the recommendations made by the industry last year with the goal of fostering the industry's development.

Sandeep Runwal, president of Naredco Maharashtra and managing director of the Runwal Group, appreciates the government's introduction of the Stamp Duty Amnesty Scheme, which would apply to outstanding fines under the Stamp Duty Act.

"It will encourage individuals to come forward and pay their past dues," he continues, "which will assist enhance tax collection." Similarly, the plan to eliminate the 0.1 percent Stamp Duty on gold and silver imported into Maharashtra is a positive step. As it will have an effect on the real estate industry both directly and indirectly."

The state budget is considered forward-looking due to its emphasis on a long-term strategy for the state. It will provide the groundwork for a wealthy and sustainable Maharashtra by focusing on five areas: agriculture, health, infrastructure, transportation, and industry.The real estate industry has been in decline for a long period of time, and the state government has taken many aggressive initiatives to revitalize the sector. 

For example, Maharashtra was one of the first states to announce a stamp duty decrease during the covid-19 era, resulting in a remarkable surge in unsold inventory sales in the state.

Pritam Chivukula, Treasurer of CREDAI MCHI and co-founder and director of Tridhaatu Realty, believes that the State Budget 2022-23 is critical to reviving the state's real estate market.

"Real estate directly and indirectly provides assistance to125 allied sectors, including steel and cement. By announcing these steps, the Maharashtra State Government is indirectly assisting those 125 connected sectors," he said. "Real estate also happens to be the country's second biggest employer and provides around 7% to GDP. As a result, the State Government's statements this year are quite welcome. Indeed, there is an urgent requirement," he said.

According to major real estate specialists in the Mumbai real estate business, the Maharashtra Budget 2022's infrastructure push was long overdue for a state aspiring to become a USD1 trillion economy. The amnesty plan is a positive step that would assist maintain investor confidence in Maharashtra's real estate market.

The decision to extend the time period during which stamp duty paid on an earlier deed may be offset against a later deed from one year to three years would encourage building activity. While stamp duty exemption on gift deeds to government organizations and local companies would significantly aid in the streamlining of different property transfer bottlenecks in urban areas. 

In a word, the Budget expresses high confidence for the state, which should result in increased momentum for Maharashtra's real estate growth.

However, without a definite resolution on the planned metro cess, the whole real estate community would be upset. The Budget was anticipated to announce a deferral of the forthcoming 1% metro cess. Indeed, one year of delay would have aided the real estate industry in maintaining good house buyer attitudes in the market. Any unfavorable client attitudes at this stage would be welcomed, particularly after the system's reboot through multiple structural adjustments and a pandemic-induced delay due to increased building costs.