Affordable Housing under GST

Sandesh Mundra & Associates, Chartered Accountants
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AFFORDABLE
HOUSING
PROJECTS

2
The Hon’ble President of India, in his address to the Joint Session of
Parliament on 9th June, 2014 had announced “By the time the Nation
completes 75 years of its Independence, every family will have a pucca
house with water connection, toilet facilities, 24x7 electricity supply and
access.”
Hon’ble Prime Minister envisioned Housing for All by 2022 when the
Nation completes 75 years of its Independence. In order to achieve this
objective, Central Government has launched a comprehensive mission
“Pradhan Mantri Awas Yojana – Housing for All (Urban)”.

Land
• High Cost of Land (40-70%)
• Financing the land
• Public Land vs Private Land
• Public Private Partnerships
3

PPP Strategies
• Enhancing access to cost of land
• Private Land in exchange for permission for more
intensive utilisation
• Private Land in exchange for High end housing
• Utilisation of Excess land lying with Govt.
• Slum Rehabilitation
• Society Redevelopment
• Change of Land use
• Operational efficiency in Construction
• Access to Finance

Risk Matrix
5

Way Forward
• Rajiv Awas Yojna – (Product of UPA
subsumed in PMAY)
• Pradhan Mantri Awas Yojna
• “Scheme of Affordable Housing in
Partnership” framed by Ministry of
Housing and Urban Poverty
Alleviation, Government of India.
• Infrastructure status given under
notification of Govt. of India,
Ministry of Finance, Department
of Economic Affairs vide F. No.
13/6/20019-INF, dated the 30th
March, 2017
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Rajiv Awas Yojna-
Subsumed in PMAY
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The notification was issued by Ministry of Housing
and Poverty Alleviation dated 19/05/2015

Sandesh Mundra & Associates, Chartered Accountants 8

Relevant definitions in PMAY
• TDR means making available certain
amount of additional built up area in lieu of
the area relinquished or surrendered by the
owner of the land, so that he can use extra
built up area himself in some other land.
• FAR = The quotient obtained by dividing
the total covered area (plinth area) on all
the floors by the area of the plot:
FAR = (Total covered area on all the
floors x 100) / Plot area

Relevant definitions
in PMAY
• EWS House - An all weather single unit or a
unit in a multi-storeyed super structure having
carpet area of upto 30 sq. m. with adequate
basic civic services and infrastructure services
like toilet, water, electricity etc. States can
determine the area of EWS as per their local
needs with information to Ministry.
10

Scope of PMAY
• Central assistance to implementing agencies through
States and UTs for providing houses to all eligible
families/ beneficiaries by 2022.
• Implemented as Centrally Sponsored Scheme (CSS)
• Except - Credit linked subsidy which will be
implemented as a Central Sector Scheme.
• A “beneficiary family” will comprise husband, wife,
unmarried sons and/or unmarried daughters.
• The beneficiary family should not own a pucca house
either in his/her name or in the name of any member
of his/her family in any part of India to be eligible to
receive central assistance under the mission.
11

Coverage of PMAY
• Support construction of houses up to 30 square meter carpet
area with basic civic infrastructure with essentially having toilet
facility.
• The houses must meet the requirements of structural safety
against earthquake, flood, cyclone, landslides etc.
• The houses should be in the name of the female head of the
household or in the joint name of the male head of the household
and his wife.
12

Progress of Technology Sub-mission as on 31.12.2016
Till date 11 new technologies have been earmarked to be adopted under the PMAY(U)
mission:
• 1. Monolithic Concrete Construction System using Plastic/ Aluminum Formwork
• 2. Expanded Polystyrene (EPS) Core Panel SystemIndustrialized Precast RCC
components technology
• 4. Glass Fiber Reinforced Gypsum (GFRG) Panel Building System
• 5. Factory Made Fast Track Modular Building System
• 6. Light Gauge Steel Framed Structures (LGSF)
• 7. Wafflecrete Building System
• 8. Modular Tunnel form System
• 9. Pre-cast Large Concrete Panel System
• 10. Structural Stay-in-place formwork system
• 11. Pre-stressed precast hollow core slab, beam, column, solid wall system
13

PMAY Scheme Phases
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PHASE 1
Start Date 04/01/2015
End Date 03/01/2017
Cities Covered 100
PHASE 2
End Date 03/01/2019
Cities Covered 200
PHASE 3
End Date 03/01/2022
Cities Covered Remaining Cities

Implementation
Methodology
• The Mission will be implemented through
four verticals giving option to
beneficiaries, ULBs and State Government.
1. In situ slum development using land as a
resource
2. Affordable housing through Credit
Linked Subsidy
3. Affordable housing in Partnership
4. Subsidy for beneficiary - led individual
house construction or enhancement.
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In-situ rehabilitation
using land as a resource
• Slum = Household of 60-70 household or at
least 300 population.
• Slum rehabilitation has 3 components:-
1. Slum redevelopment.
2. Free sale.
3. Relocation of other slum dwellers.
• Private participation demanding substantial
grants may not be encouraged – Private project
disallowed
16

In-situ rehabilitation using land as a
resource
• Covers slum situated on government or private lands
• Selection of private partner selected by states by the open bidding
process.
• Grant of Rs. 1 lakh per house would be admissible for all houses
built for eligible slum dwellers in all such projects.
• State/UT government and cities are supposed to offer additional
Floor Area Ratio (FAR)/Floor Space Index (FSI)/Transferable
Development Rights (TDR) for slums on private land.
17

• The private project developers will provide
transit or small-term accommodation the
beneficiary slum dwellers while the
construction is going on.
• The state and UT will decide whether the
constructed houses will be given as ownership
rights or on renewable, mortgage able and
inheritable leasehold rights.
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• Sale of “free sale component” of project
should be linked to the completion and
transfer of slum rehabilitation component to
the implementing agency/state.
• Such stipulation should be clearly provided
in the bid document to avoid any
complication.
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Credit Linked
Subsidy Scheme
• The credit link subsidy is provided on the home
loans taken by the urban poor population to
build, purchase or renovate houses.
• The subsidy is given to 3 types of income
groups:
1. Economically Weaker Section
2. Lower Income Group
3. Middle Income Group
• MIG is further divided into two on the basis on
annual income of the individual.
20

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Particulars EWS LIG MIG-1 MIG-2
Annual Income Up to Rs.3 lakh
Rs.3,00,001 to Rs.6
lakh
Rs.6,00,001 to Rs.12
lakh
Rs.12,00,001 to
Rs.18 lakh
Housing Loan
Amount Eligible For
Interest Subsidy
NO LIMIT NO LIMIT Up to Rs. 9 lakh Up to Rs.12 lakh
Maximum Loan
Tenure
20 years 20 years 20 years 20 years
Carpet Area 30 square meters 60 square meters 120 square meters 150 square meters
Interest Subsidy 6.5% 6.5% 4%
3%
Credit Linked Subsidy Scheme

CLSS for MIG

Features And Benefits Of Credit Linked
Subsidy Scheme
• The loan taken under this scheme is supposed to be paid off in EMI
i.e. equated monthly instalment.
• The loan preference in this scheme is given to women, manual
scavengers, scheduled tribes, scheduled castes, backward classes,
minorities, people with disabilities and transgender.
• Interest subsidy is calculated on NPV (net percent value) basis at
9% discount rate.
• The applicant/ any immediate member should not own a well
built or pucca house in any part of India.
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Subsidy Scheme
• Applicant requires to present self certificate or affidavit to avail
interest subsidy on loan.
• HUDCO (Housing and Urban Development Corporation) and NHB
(National Housing Bank) has been decided as CNAs (Central Nodal
Agencies)
• It channelize subsidy under this scheme to the loan lending
institutions and to monitor the whole lending process.
• Beneficiaries eligible can directly apply to primary lending
institutions.
24

25

Features And
Benefits Of
Credit
Linked
Subsidy
Scheme
Primary
lending
institutions
(PLI)
includes:
Scheduled Commercial Banks
Housing Finance Companies
Regional Rural Banks (RRBs)
State Cooperative Banks
Urban Cooperative Banks
Any other institutions as may be identified by the Ministry
PLI can sanction loans after proper verification of application and
there after that applicant can claim subsidy from central nodal
agencies.

Subsidy Scheme
• Available to build or rebuild houses, add necessities such as
kitchen, toilet etc.
• Documents - The state/ union territories/ urban local body/
primary lending institutions will be taking Aadhar card/ voter ID
card/ any other unique identification/ a certificate of house
ownership from revenue authority of beneficiary’s native district
to link beneficiary identification.
• The EMI amount under credit linked subsidy is maximum Rs.
2000*.
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Subsidy Scheme
• The loan subsidy is limited to Rs. 6 lakh* where as there is no loan
amount limit specified. But the loan amount will be given
considering applicant’s profile.
• The credit linked subsidy under Pradhan Mantri Awas Yojana
offers fixed interest rate for 15 years*.
• The houses in rural area cannot benefit from the credit linked
subsidy in interest rate.
28

Statistics
• A total of 17,634 claims for subsidy amounting to Rs. 316.20 crore
were processed under CLSS during the year 2016.
29

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AFFORDABLE HOUSING IN
PARTNERSHIP

Affordable Housing in
Partnership
(AHP)
• This is a supply side
intervention.
• To provide financial assistance
of Rs 1.5L to EWS houses
• “EWS households” are defined
as households having an annual
income up to Rs. 3,00,000
(Rupees Three Lakhs).
States/UTs shall have the
flexibility to redefine the annual
income criteria as per local
conditions in consultation with
the Centre.
• Built by States/Uts through its
agencies or in partnership with
private sector including
industries.
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Affordable Housing in
Partnership (AHP)
• The States/UTs would decide on an upper
ceiling on the sale price of EWS houses to
make them affordable and accessible to the
intended beneficiaries.
• The sale prices may be fixed by using
following principles :-
1. If Project by States/UTs Agencies – At
No Profit No Loss
2. If Project with Private Partnership -
Through open transparent process
factoring in incentives provided by
Centre/State/ULB

Affordable Housing in Partnership (AHP)
• If Project is of mix of houses for different categories – Two conditions
1) at least 35% of the houses in the project are for EWS category
2) a single project has at least 250 houses
• Allotment of houses to identified eligible beneficiaries (should be part
of HFAPoA) should be made following a transparent procedure as
approved by SLSMC
• Preference in allotment may be given to physically handicapped
persons, senior citizens, Scheduled Castes, Scheduled Tribes, Other
Backward Classes, minority, single women etc.
• Detailed Project Report of such projects prepared by concerned
implementing agencies should be approved by SLSMC.
33

Beneficiary-led Individual House
Construction or Enhancement (BLI)
• Assistance to individual eligible families belonging to EWS
• Central assistance of Rs. 1.50 lakhs
• Covers beneficiaries not taking benefit under any other
component of the scheme.
• Beneficiaries to approach ULBs with documentation regarding
availability of land owned by them.
• ULB shall validate the information given by the beneficiary and
building plan
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Beneficiary-led Individual House
Construction or Enhancement
(BLI)
• ULBs prepares an integrated city wide
housing project for such individual
beneficiaries in accordance with the City
Development Plan (CDP)
• Such Projects would be approved by States
in SLSMC.
• State/UT or cities may also contribute
financially for such individual house
construction.
• The last instalment of Rs. 30,000/- of GoI
assistance should be released only after
completion of the house.
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• Progress as on 31.01.2017 As on 31.12.2016, 34 MoAs have been
signed with 29 States and 5 UTs; 3,888 cities have been selected in
34 States/UTs for inclusion under the Mission. 3031 projects for
construction of 14,01,097 houses of Economically Weaker Section
(EWS) category in 1,792 cities of 29 States/UTs involving central
assistance of Rs. 20,724.61 crore have been accepted by
Government under the Mission. Central assistance of Rs. 4,686.82
crore as part of 1st instalment has been released to the concerned
States against approved projects.
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Infrastructure Status
As per Notification provided in Ministry of Finance, Department
of Economic Affairs vide F. No. 13/6/2009-INF, dated 30/03/17:
37

Thank You !
38

Affordable Housing under GST

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