Builders demand relaxation in bank norms under GST

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Banks should relax repayment norms for builders who take up government projects and face delays in getting the payments, said A. Puhazhendi, president of the Builders’ Association of India (BAI). Mr. Puhazhendi, who inaugurated the 38th centre of the Association in the State at Udumalpet on Sunday, told The Hindu that several State Governments float tenders for projects even if adequate funds were not available. This leads to delay in payments, going up to nine months or even more than a year. “There are instances of builders committing suicide in some States. I have met the bankers in this regard and requested them to relax the norms and restructure loans,” he said.

Earlier, infrastructure projects were exempted from Service Tax. With the introduction of Goods and Services Tax, all projects are covered under it. Only recently, the GST Council announced 5 % composite scheme for private builders. This should be extended to contractors who take up infrastructure projects or such projects should be exempted from GST, he added.

With regard to increase in cement prices, Mr. Puhazhendi said the recent 40 % hike is abnormal and a “burning issue”. In the southern States, the builders are already hit by several other problems. The hike in cement prices brings construction activities to a standstill. In the northern States, the hike is 25% But even that affects construction. The increase leads to delay in projects, in turn attracting penalty under RERA. “I met the Central Government ministers concerned and sought a regulatory authority to control cement prices,” he said. The BAI currently has 175 centres in the country and eight of these were opened in the last one year, he added.

Read More at: https://www.thehindu.com/news/cities/Coimbatore/builders-demand-relaxation-in-bank-norms/article26626781.ece