Govt gives relief for REITs, Infra Investment Trusts on MAT

The government today said minimum alternate tax would be applicable on the real estate and infrastructure investment trusts only when there is actual transfer of their units. The announcement, made by Finance Minister Arun Jaitley in the Lok Sabha today, would provide relief to realty players who are planning to launch Real Estate Investment Trusts (REITs) for monetising their commercial assets. "I propose to provide for exemption from levy of MAT on gains and losses arising from exchange of shares with the units of a business trust REIT/InvIT. "The liability under Minimum Alternate Tax (MAT) will arise only on actual transfer of such units," Jaitley said while replying to the discussion on Finance Bill 2015-16 which was later passed by the Lok Sabha. Earlier, MAT was also applicable on exchange of equity shares of an Special Purpose Vehicle for REIT or InVIT units. REITs and Infrastructure Investment Trusts (InVITs) are aimed at attracting funds in a transparent manner into the real estate and infrastructure sectors. Realty giant DLF  , which is planning to float REITs, said the exemption removes a major policy hurdle and would give a significant boost to the establishment of these trusts. It has been clarified that MAT would not be applicable on notional book gains, arising from exchange of shares in SPV with units of REITs/InvITs, DLF's Group CFO Ashok Tyagi said in a statement. DLF plans to set up its first REIT within this year itself subject to receiving requisite approvals. The easing of MAT applicability would make REITs and InvITS "far more viable and attractive", Tyagi said. Welcoming the move, CREDAI President Getamber Anand said it would encourage companies which are planning to set up such trusts. Jaitley said the Finance Bill 2014 provided for tax neutrality in respect of exchange of shares of a SPV with the units of a business trust. However, no neutrality/deferment of MAT liability was provided, he added. According to him, the liability under the MAT may arise due to recording of exchange of the shares with the units at fair value in compliance with the provisions of notified accounting standards by a shareholder, being a company. "This may result into cash flow problems for the companies," Jaitley said. These two trusts, which can be listed on stock exchanges, would help channelise both domestic and overseas investments into real estate and infrastructure projects in the country.

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City heritage panel strongly protests DP omissions in eight-page letter





Complains Its Suggestions Were Ignored

The Mumbai Heritage Conservation Committee (MHCC) has shot off a strongly-worded, eight-page suggestionobjection letter against the draft Development Plan to the chief engineer (DP), the BMC commissioner and the chief secretary.

The MHCC, constituted by the state government, has already verbally voiced its grievances against the draft DP and the development control regulations (DCR).

The letter, sent on Wednesday and accessed by TOI, mentions seven main points of grouse, including omission of heritage sites and precincts from the draft DP and how recommendations submitted by the MHCC have not been included.

"The Mumbai Heritage Conservation Committee had submitted to the DP team and consultants at the public consultation during the Existing Land Use study revised regu lations for conservation of heritage sites (both natural and manmade), grant of transferable development rights to ownerslessees of heritage buildings or buildings in heritage precincts and conditions for grant of such rights and guidelines on display of hoardings on heritage buildingsstructures and in heritage precincts. These documents are endorsed by MHCCs headed by D M Sukthankar, Sharad Upasani, Dinesh Afzalpurkar and V Ranganathan. None of the recommendations have been included while framing the regulations. MHCC strongly objects to this disregard and suggests serious relook at the documents attached again with this letter for incorporating in the special heritage development control rules," said the letter.

The MHCC has requested that attachments to it letter be treated as suggestionsobjections and a decision on finalizing the heritage rules should not be taken without hearing the MHCC's views.

The committee discussed the heritage regulations in the draft DP and DCR, published by the BMC on February 25, in a meeting a month later and made the observations enlisted in Wednesday's letter.

MHCC chairman V Ranganathan has already met the chief secretary over the glaring omission of heritage sites and precincts from the proposed land use plan for the city.He told TOI he would follow up on the matter.

A committee member said it was important that the letter be sent out as the draft DP otherwise has the potential to mar the heritage fabric of Mumbai. "There are several road widening proposals which could affect heritage sites, structures and precincts in the city . These need to be preserved and therefore sending out our letter was important," said a member.

TIMES VIEW :

The review committee has to take note of the points raised by experts. A plan that pits development against heritage cannot take Mumbai forward. Citizens are waiting for a bold decision from the review committee, not a compromise to act as a face-saver for people who have prepared this error-ridden DP.

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