According to the Thomson Reuters Foundation, the standard size of land holdings in India is 11,500 sq. Metres, with higher than two-thirds of owners holding less than 40,000 sq metres of cultivable land. In rural India, over 56 percent of the households own no property. “Even as the size of holdings declined due, to indebtedness & inheritance over the decades, demand for land for industrial & development use has increased, as the economy grew. This has led to conflicts b/w farmers and states, stalling projects worth billions of dollars.
With the implementation of demonetisation, the Real Estate (Regulation and Development) Act (RERA) and the Goods and Services Tax (GST), many small land bankers sold their inventories to more significant players. A shortage of funds & the prolonged slowdown in the real estate market, have forced several mid & small-sized developers to partner with big developers, for completion of projects.
Momentum is also building, for the formation of real estate within the ambit of GST, with various states backing finance minister Arun Jaitley’s suggestion that real estate should be taken under the GST. The GST Council meeting on November 9, 2017, couldn’t arrive at a simplification of the process & has postponed the decision to next meeting. Furthermore, such a measure would require an amendment to the constitution. At present, schedule seven of the law lists taxation of land and buildings, as part of the state list. Since July 1, 2017, leasing of property, renting of premises, as well as EMI’s paid for the purchase of under-construction houses, have been attracting GST. Any lease, tenancy, easement, or license to occupy land is considered as a supply of service & hence, comes under the central GST (CGST).