PROPERTY PLUS

Council seeks withdrawal of service tax on construction

THE CONSTRUCTION Industry Development Council (CIDC) has demanded the withdrawal of the 10 per cent service tax being levied on construction and real estate activities.

"We would like the withdrawal of service tax levy, pertaining to the construction industry and services," CIDC chairman Uddesh Kohli said, spelling out the council's pre-budget suggestions. He said service tax exemption for construction activities relating to airport, bridge, road and port would speed up the growth process through speedy development of infrastructure sector, which is very important for sustainable growth process.

"It is imperative to accord full exemption for such kind of construction projects," he said. He also favoured keeping export earnings from services and consultancy outside the purview of the levy. Moreover, the Government should consider deferring of levy of tax on person securing services abroad, Mr. Kohli said.

The CIDC also demanded higher exposure of bank finances to construction and housing activities.

It recommended that housing loans be made available in the range of 5 per cent to 7.5 per cent interest per annum up to Rs 25 lakh.

Fiscal incentives should be provided to promote rental housing, CIDC said and asked for reduction in stamp duties.

It also sought simplified rules and procedures related to VAT and favoured the complete abolition of wealth tax for house property.

Urban households in the country have on an average 56 per cent more physical and financial assets than those in rural areas, according to the latest survey conducted by the National Sample Survey Organisation.

Average value of assets owned by an urban household was Rs.4.17 lakhs compared to Rs.2.66 lakh for a rural household as on June 2002, according to the NSSO survey released recently.

Among rural households, average value of assets (AVA) was highest in Punjab at Rs.9.04 lakhs, followed by Haryana at Rs.7.16 lakhs and Jammu and Kashmir at Rs.6.15 lakhs. Orissa had the lowest AVA of Rs 0.98 lakh per household.

Jammu and Kashmir had the highest value of assets per urban household at Rs.10.67 lakhs.