There is a bad news for those who are planning to construct their houses as government has decided to levy 1 per cent entry tax on cement which would increase the prices of cement between Rs 3 and 5 per bag.
At present there is 12.5 per cent Value Added Tax (VAT) on purchase of cement. Besides the entry tax on cement is 3 per cent. With an increase in 1 per cent entry tax it would now be four per cent.
The hike in one per cent entry tax on cement will enable the state to collect additional revenue of Rs 100 crore annually.
The government has also introduced a new compounding tax system for the real estate, following which now the builders and promoters would have to pay 3 per cent tax of the total cost of the building or flat. “This in turn increase the price of flats,” official said.