NEW BUILDING RULES A BANE FOR REALTORS

The new building permission rules of the HMDA and GHMC and registration with the Real Estate Regulatory Authority (RERA) is of benefit to consumers but a bane for realtors.

Consumers have seen savings of 12 per cent on the total cost as the government has exempted consumers from the 12 per cent GST, which will be levied on the builders.

GHMC and HMDA issue a building sanction plan which entitles the builder to complete the construction within a specified time. One flat is mortgaged to the GHMC, which releases it upon the builder securing an occupancy certificate.

This process ensures the builder sticks to the rules.

After the construction is completed and approved by architects and verified by Town Planning officials, an occupancy certificate is issued for that particular structure. Only after the occupancy certificate is obtained do the electricity department and Water Board sanction power and water supply lines. The RERA Authority will also register the property only after the occupancy certificate is issued.

Officials from both the nodal agencies said that if the consumer purchases a fully constructed building or flat he/she will be exempted from 12 per cent GST, though the same has to be paid if the structure is under construction. However, after purchasing the flat the consumer has to pay registration charges to the stamps and registration department. On the flipside, realtors have been demanding freedom from the GST net as they have paid Goods and Service Tax when they purchased the construction material.

Mr C. Sekhar Reddy, former national president of Credai, said that the builders have been burdened with the 12 per cent GST to obtain the occupancy certificate and register with RERA, but they have been paying GST on all purchase material.