Sobha: Ready for RERA & GST
June 30, 2017
Recently Economic Times got in touch with Mr J C Sharma, our VC & MD. In this lengthy interview, Mr Sharma informed shared how Sobha is ready for RERA and how it is approaching GST. Here are the edited excerpts from the interview.
As far as GST rates are concerned for the realty space, the rate applicable for developers has been pegged at 12%. Are you happy with the decided rate for the realty sector and is it net neutral as far as benefits go?
The Government has prescribed 12% rate for the realty sector and we all are happy. It is for the first time that developers should be able to take benefits of the excise and other areas. With the current outflow which used to be about 5% to 6% (and even if it goes to 12% with no land abetment benefit) this increased benefit should help us to ensure that there is no extra burden on our customers.
The FM has asked developers to pass on any benefits availed under GST on to the end customer; do you see significant price cuts in the market post GST?
You need to look at places where the property prices in my view, are bit higher. Say for example, within Mumbai and for similar others, it will be extremely difficult. Chances are that there may be an increase because 12% flat or 18% flat initially may increase the cost; but most of the market where you have a price point of around Rs 5000 to 6000 and the construction cost and other services cost ranges between 2500 to 3200 or so, I do believe that there is a scope of some benefit being passed on to the end customers. We have to keep our fingers crossed because the passing on has to happen provided the vendors of our materials like steel, paint, tiles etc. pass on the benefit to us.
How well placed is Sobha equipped to cope with RERA and what really is the strategy that you have developed to deal with life after RERA implementation?
RERA basically in my view, as our honourable minister Venkaiah Naidu has communicated, is that we have to walk the talk. We have to perform what we promise. We cannot overpromise and under deliver where a customer puts their lifetime savings and the future savings as well as by gives that money to a developer.Sobha has been always prompt in delivering its projects on time. We do not have a track record where Sobha has delayed its project completion.
We do believe that RERA is going to benefit the customer. RERA should put a full stop to the various malpractices prevalent and we believe that this is a welcome step. The only grievance is that the state governments must ensure that the approvals are given in time and the state governments must bring the law at the earliest with clarity. We are perfectly okay and ready for RERA related challenges.
Check Full Interview Here: