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Keep Bills of House Construction: Royalty on building materials may hit home buyers in MP

Do not buy material  from illegal suppliers.Minor mineral royality to be paid

3rd Sept 2014Bhopal: Your dream house may cost you a bomb. It could significantly push your costs to build a new house, if a cabinet decision by the Madhya Pradesh government on Tuesday, is any indication to go by.
The state cabinet on Tuesday hiked royalty on basic building materials such as sand and granite by about 100% which would result in cost escalations.
For instance, the royalty on sand has been increased from present Rs 53 to Rs 100 per cubic metre. Similarly, royalty on marble used for tiles and blocks would now be charged at Rs 1,000 from earlier Rs 700 per cubic metre.
Home buyers and realtors have severely criticized the hike, saying the increase will adversely impact the real estate sector in the state, already reeling under a huge slow down.
The realtors' body – the Confederation of Real Estate Developers Association of India (CREDAI)—criticizing the state government’s decision, expressed fears about vendors manipulating the situation.
"In theory, the increase in royalty should not impact the retail rates much but experiences show that vendors would take full advantage of the situation and increase the rates substantially," said association spokesperson Manoj Singh.
"Government should adopt some measures to keep strict vigil on the vendors so that prices remain under control."
The government justified the hike, saying it would not result in any escalation in construction costs.
The royalty on minor minerals has been revised after more than four years, following recommendation by a committee, which studied the market rates of the minerals — which are sourced locally from different pockets in the state, it said in a statement announcing the hike.
"I don’t know why government is targeting the real estate sector," said Jamil Qureshi, a builder.
"We already pay 8% service tax. Increase in royalty on building material is like adding insult to injury."
Qureshi said after the increase in royalty, he would have to shell out Rs 35 per cubic feet of sand instead of Rs 20.
Bricks too, would be dearer by Rs 1,500 per truck.
"The increase, will obviously be passed on to the buyers," the trader pointed out.
Sanjay Goel, who was unaware of the government’s decision and is constructing a house in old city area was taken by surprise.
"Building a house today is a challenging job," said Goel.
"Government has no mechanism to control inflation and I observe a change in rates every time I buy some building material like murram, sand or bricks."
"I am sure retailers would make the most of government’s decision making things more challenging for me."
At a glance
The royalty on sand has been increased from Rs 53 to Rs 100 per cubic metre.
Similarly, royalty on murram has been hiked from Rs 27 to Rs 50.
Royalty on boulder has been increased from RS 35 to Rs 40, while on gravel road metal; it has been increased from Rs 44 to Rs 100.
Royalty on marble floor tiles and blocks would now be charged at Rs 1,000 from the earlier Rs 700.
Royalty on marble slab has been increased from Rs 200 to Rs 500.
Granite’s royalty has been hike to Rs 2000 from Rs 1,500.

Pune administration likely to make royalty certificate compulsory for builders

A proposal readied by the administration highlights the thefts that were caught and reported and those that are not caught and go unreported.

TO ensure royalty from mining minor minerals, especially sand for construction purposes, the district administration may soon consider making royalty certificates compulsory for builders for getting completion certificate for their buildings.
With reports of rampant illegal sand excavation for construction purpose coming to the fore with unfailing regularity, the administration has come up with a proposal which will ensure that a developer produces the royalty certificate or a challan issued to them for getting the completion certificate to the district
“While efforts are on to track sand thefts, those that are not caught need to be trapped. With the amount of construction happening in the city, it is obvious that there are several who are not paying the mandatory royalty for excavation and many may be procuring material from persons who are involved in illegal excavation. If we ensure that the concerned person produces challan and royalty transport permit for royalty paid, we can ensure that the royalty is not evaded and that the sand and other material used is not illegally excavated,” said deputy collector Shankarrao Jadhav.

With a bar coded challan already in place, the added clearance in terms of royalty certificate will ensure that the material is procured from the right means and there is no evasion of royalty, officials said.
For government buildings, the royalty is deducted but with rampant evasion from the private sector, the administration plans to ensure that there is no evasion.
Pune district administration has set a target of Rs 175 crore revenue from sand mining.
The district has already netted at least Rs 120 crore through continuous drives and penalties against offenders.
The district administration has even entrusted all officers on the field to file cases as well as initiate action and put the same online so that the information is available to all the key officers in the administration. Last year, the district did not achieve the target and this year, all officers have doubled up efforts, said Jadhav.
The district administration has also demanded that separate machinery and cell be started. The state government is looking at mining as an important source of revenue.
Separate machinery and government boats at various sites to check on illegal excavations too have been requested by the administration in the proposal,
officials said.
With strict guidelines put against those miners who indulge in mining more sand than the permissible limit within the leased area, these guidelines by the administration will definitely bring about some restraint, hope officials.
According to the draft of the central government, though mining of minor minerals like sand is perceived to have lesser impact as compared to mining of major minerals, the activity as a whole is seen to have significant adverse impacts on environment.
The draft states that it is necessary that the mining of minor minerals is subjected to simpler but strict regulatory regime and carried out only under an approved framework of mining plan.
The building fraternity does not seem to be in its favour. Satish Magar, from Confederation of Real Estate Developers Association of India (CREDAI) said, “It does not seem to be a hassle free system as it only increases paperwork. The administration in turn should improve their monitoring system rather than have checks on challan.”

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