Chandigarh: The Punjab Pradesh Beopar Mandal has requested the Union finance ministry to reconsider its decision to impose an 18% goods and services tax (GST) on commercial rental income. In a letter to finance minister Nirmala Sitharaman, the business group expressed concerns about the potential negative impact this policy could have on landlords and the broader economy.
While acknowledging the govt’s intention to streamline tax collections, the mandal argued that this policy could increase operational costs for businesses, straining a fragile economic recovery. They have emphasised commercial real estate’s crucial role in supporting various sectors, including MSMEs (micro, small and medium-sized enterprises), large corporations, and retail ventures.

The letter highlighted that the proposed GST increase would likely burden tenants with higher rental costs, leading to increased consumer prices and inflationary pressures, on essential goods and services particularly. The mandal pointed out how many businesses continued to struggled to recover from the pandemic, and how for MSMEs, rising rental expenses could result in downsising or even closures, exacerbating unemployment and economic instability.
Mandal president Amit Kapoor said: “We request the finance ministry to explore alternative measures to balance revenue generation with the growth and stability of the commercial real-estate sector.” He suggested either reducing the GST rate or exempting small landlords..