REAL ESTATE AND CONSTRUCTION

Advisory, Tax
and Regulatory
Services
kpmg.com/in
Overview
The Real Estate Sector is of prime importance to our country,
particularly because of its significant contribution to the GDP and
generating employment opportunities. Further, it also supports
various main stream industries such as cement, steel, etc. More
so, it satisfies one of the primary needs (i.e. the one of ‘shelter’)
of mankind. The above factors certainly demand a preferential
treatment and attention to the sector.

The Government is also supporting the sector by introducing Pre-investment phase

many progressive measures to unlock the potential of this
sector and also to meet the increased demand levels created
by changing demographics and booming economies.
The Indian Real Estate Sector has seen ups and downs and
is currently entering into another upswing phase, with many
developers launching projects, not only in the mainframe
Tier-I cities, but also in Tier-II & Tier-III cities. However, for
any project to be successful, inter-alia, sufficient finance at
appropriate cost is very important.
The upswing in Real Estate Sector has also encouraged
institutional investors, especially funds to look at new
investment opportunities in the Real Estate Sector, especially
the retail and commercial sectors in addition to the residential
sector.
In the grasp of new changing environment in tax & regulatory
regime particularly in the wake of introduction of DTC, GST
and IFRS it is important for the stakeholders to assess the tax
& regulatory impact at the stage of planning and strategising
the foray in a tax and regulatory efficient manner.
KPMG provides wide spectrum of services encompassing
various industries characteristics and management
capabilities. Our Real Estate Sector team is a specialised
team of professionals who focuses on advising clients
associated with the Real Estate business. We provide
diversified range of services on issues that may arise from the
life cycle of Real Estate project, including the pre-investment
advisory, ongoing tax compliance during the life cycle and
formulating the exit strategies.
KPMG’s diversified range of services to developers, land
owners, funds and corporates foraying into the Real Estate
Sector has been broadly segmented as under:
Our service offerings in the pre-investment phase would
encompass the following:
Strategic and Commercial Intelligence Services
• Market Analysis: Real Estate market assessment,
analysing demand, supply and price trends across asset
classes and key cities
• Financial Modelling and Business Plan Assessment:
Assess the key assumptions that would impact the
cash flow and valuation. Conduct sensitivity on the key
assumptions and their impact on the cash flows
• Project Feasibility: Advice on how the proposed area of
development is placed in the overall landscape of the
city; demand, supply and price trends in the city; effective
development mix for the land parcel, etc.
• Business Strategy Analysis: Evaluate the strategic
implications of foray into the considered projects; the
inter-relationships between Real Estate development
business and proposed ventures that can be leveraged;
likely profitability scenario’s for the considered projects;
kind of structure that is relevant for this businesses;
likely risks and the possible risk mitigation strategies;
possible partner for the planned execution; possible roll-up
strategies (if any).

© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
• Fund Strategy: Help Real Estate focused Funds in • Suggesting reorganisation of the Indian Investee
developing their go-to-market strategy. Also, assist company/group re-organisation for effective value capture
the Funds in investor presentations, private placement
• Addressing issues relating to protection of treaty benefits
memorandums, etc.
for overseas investors and addressing Permanent
• Location Assessment: Rate, Rank and Recommend prime Establishment/Place of Management exposure, if any
locations based on our discussions and understanding of
• Identifying and evaluating alternate tax and regulatory
the overall business strategy, critical skill sets, regional
efficient options for investing in the project entities
preference, etc.
• Tax health check-up advisory services
• IPO planning/land bank planning advisory services
Transaction Services
• Tax due diligence services
• Providing buy side due diligence for potential investors,
acquirers, co-ventures • Tax service offerings for investing in or divesting from the
Real Estate projects
• Providing sell side assistance and vendor due diligence in
connection with proposed disposals/hive offs of assets/ • Other tax and regulatory advisory services.
SPV’s.

Tax and Regulatory Services

• Identifying various funding options for the project and
analysing feasibility/implications of the identified options
• Conceptualisation of suitable capital structures
that facilitate investment and dovetail into waterfall
mechanisms for up-streaming of income as well as
evaluating the modes of repatriation of profits from a tax
and regulatory perspective.
• Conceptualisation of a Fund structure (where Fund route is
adopted) with a view to achieve commercial objects while
addressing tax and regulatory facets of operation of the
Fund
• Assisting in establishing domestic and overseas Funds
including assisting in obtaining necessary registration/
approvals
• Review of financial model and providing inputs on tax
inconsistencies, leakages etc. with the objective to
streamline tax implications

© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Investment phase

Our service offerings in the investment phase would
encompass the following:
Financial Advisory and Valuation Advisory Services
• Financial Advisory services
- Financial advisory services to Real Estate developers
for raising Private Equity (at entity level, portfolio level
and SPV’s/project level) including structured financing
through promote mechanisms
- Joint Venture/Mergers and Acquisition opportunities for
developers towards projects level SPV’s/specific asset
classes and at the entity level
• Valuation Advisory services
- Portfolio valuation for Real Estate Funds/investments
- Valuation for strategic purposes including Fund raising,
joint ventures etc.
- Project level/entity level valuations
- Regulatory valuation for inbound investments.
• Margin management by adopting appropriate cost
management and planning process augmentation
• Project monitoring to enable management/investors to
achieve overall project objectives
• Internal audit services to provide management/board
assurance on internal control.
Accounting Advisory Services
• Assessment according to global investment and helping
to set the performance standards (GIPS) by leveraging our
global network of member firms
• Coordination of global property assessments and
benchmarking with the peer group
• Support in transformation into IFRS
• Assessment of risk management systems and assess the
robustness of internal reporting systems
• Exit/IPO planning and/or strategic consolidation/re-
organisation of portfolios.

Tax and Regulatory Services

• Assistance in obtaining various regulatory approvals
• Assistance in incorporation/establishment of Indian
entities
• Assistance in obtaining registrations under direct tax,
indirect tax and other applicable legislations (i.e. PAN, TAN,
IEC Registration, Service Tax Registration, etc.)
• Review of agreements, contracts, transaction
documentation and providing inputs
• Assistance in handholding the investment from a tax and
regulatory perspective.
Post-investment phase
Forensic Advisory Services
• Conduct event-led investigations by gathering and
analyzing data in cases of suspected/ alleged fraud, help
clients identify perpetrators and uncover the modus
operandi
• Help clients assess their vulnerability to fraud and reduce
fraud loss and revenue leakage by evaluating existing
counter-measures and developing effective anti-fraud
policies, systems and controls
• Assistance in the resolution of Joint development
agreement violations as well as land acquisition disputes.
Provide accounting advice to assist in the resolution of
disputes and in the processes of arbitration, litigation,
mediation in joint development agreement as well as land
acquisition disputes

Our service offerings in the post-investment phase would

encompass the following:
Governance, Risk and Compliance Services
• Model business process for creating value from business
operations
• Scalability services based on developing, implementing
and integrating organisation, people, business processes,
with business strategy
• Enterprise risk management to facilitate management
to meet business imperative, regulatory and other
requirements

© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
• Assistance in regulatory compliance, including sector- • Evaluating various structuring options to ensure reduction
specific regulatory requirements, anti-bribery and in overall indirect tax costs, streamlining credits without
corruption compliance and compliance with social and compromising the commercial imperatives
environmental norms
• Providing interface with the local tax authorities across
• Assistance in conducting background checks and integrity India through a network of in-house team members and
due diligence for a target for Mergers and Acquisition, a professionals
new vendor and prospective employees.
• Developing policies, formulating tax manuals and
procedures for key tax functions
Tax and Regulatory Services • Conducting strategic review of in-house tax functions/
select projects to ensure efficient compliance with
• Review/structuring of contracts to be entered by
applicable laws
builder/developer with landowner, development / joint
development right agreements from tax and regulatory • Strengthening management monitoring system and
perspective designing of MIS frameworks from a tax and regulatory
perspective
• Evaluating arrangement with contractors and sub-
contractors to streamline multiple tax levies • Advising on potential impact of the DTC and GST on the
business and planning for the same
• Preparation/validation of pricing models for various
options under consideration (plotting projected values in • Providing on-going tax advisory and compliance services.
procurement and supply chain along with applicable taxes
and assumptions)
• Advising on eligibility/planning to avail tax incentives
available under the Indian tax regulations
• Advisory on possible exit strategies and assistance in
implementation of the selected strategy
• Transfer Pricing benchmarking study in respect of
international transactions entered into between
associated enterprises
• Assistance in respect of preparation/filing of various
tax returns (including Indian returns of foreign entities),
ascertaining periodic tax liability (such as advance tax, VAT
and CST payables, etc.) and other regular compliances
• Review of procurement strategy to balance indirect
taxes (local/inter-state procurements, offshore supplies/
services, sub-contracting arrangements)
• Classification, applicable rates and valuation for key
products/services along with available exemptions/
concessions, operation modalities and documentation trail

© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Contact us

Vikram Utamsingh
Head - Markets
T: + 91 (22) 3090 2320
E: vutamsingh@kpmg.com

Girish Vanvari
Executive Director
T: + 91 (22) 3090 1910
E: gvanvari@kpmg.com

kpmg.com/in

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or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information
is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation.

© 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. KPMG and the KPMG logo are registered
trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. The KPMG name, logo and “cutting through
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