The National Real Estate Development Council (Naredco) on Tuesday urged the government to rationalise the GST rates on under construction properties and also solve the liquidity crisis at the earliest.
Speaking to reporters here, Naredco President Niranjan Hiranandani said that the apex body of the real estate sector has submitted its memorandum of recommendations for the upcoming Union Budget 2019 - 20 to the Finance Ministry and the Housing and Urban Affairs Ministry.
"GST on under construction properties should be brought down to 8 per cent with ITC (Input Tax Credit) and for affordable housing to 5 per cent with ITC, " Hiranandani said.
Currently, the Goods and Services Tax (GST) on under construction properties is 18 per cent and that on affordable housing projects is 8 per cent.
Talking of the liquidity crisis, he said that for the last couple of years the non - banking financial companies (NBFCs) were the major source of liquidity for the sector, and after the recent crisis in NBFCs the real estate business is under severe financial stress.
"After the disaster which has taken place in IL&FS, we are in a quandary, because NBFCs have come into a crisis and the liquidity position of banks is not improving.