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Mumbai

Updated on: Wednesday, May 29, 2019, 12:28 AM IST

Project management consultant wants housing authority to foot extra service tax burden

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Mumbai: The proposed Rs 5,000 crore housing project at Motilal Nagar, Goregaon (W), which will create approximately 18,000 more houses in the city, has hit a roadblock. The appointed project management consultant (PMC) wants the Maharashtra Housing and Area Development Authority (MHADA) to bear the extra tax cost, according to sources.

An agreement was reached with the consultant — Shikre and Associates, a private agency, to prepare a blueprint of the project. At the time of signing the agreement, the service tax was 14.5 per cent and on this basis, the cost for carrying out the work was computed. But, since the Goods and Services Tax (GST) came into effect, the tax increased to 18 per cent and the consultant now wants the extra 3.5 per cent tax to be borne by the MHADA. The housing authority had given the work to the private agency for an estimated Rs 25 crore.

A MHADA official said since this is a rare case wherein the consultant has raised this issue after his appointment . “The higher-ups will take a decision on it. The authority may pay the 3.5 per cent tax money but will ask them to make pay first and reimburse them later,” said the official. According to MHADA, 3,500 families have their houses on the 150-acre land at Motilal Nagar. In the new project, not only will the original tenants will be rehabilitated but other houses will be built, to be sold in its lottery schemes.

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The decision to build the township had come on the directions of the Bombay High Court (HC). The advocates representing MHADA told the HC, since on this land parcel there were occupants who had illegally extended their houses, both, the MHADA and the Brihanmumbai Municipal Corporation (BMC) were finding it hard to demolish those structures. To raze these illegal structures, the MHADA had come up with the idea of the township.

The MHADA officials believe, as the value of the real estate property in Goregaon has already skyrocketed, several developers will show interest in this project. The authority expects to earn revenue through the sale of houses in the lottery schemes.

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Published on: Sunday, March 31, 2019, 05:20 AM IST
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