Strong case to bring real estate under GST, says Arun Jaitley
Finance Minister Arun Jaitley on Wednesday said there was a strong case to bring real estate sector under the ambit of the goods and services tax (GST). While delivering a lecture at Harvard University, Jaitley said that the matter will be discussed in the next meeting of the GST, which will be held on 9 November, in Guwahati.
Jaitley was delivering the ‘Annual Mahindra Lecture’ on India’s tax reforms. He said, “The one sector in India where maximum amount of tax evasion and cash generation takes place and which is still outside the GST is real estate. Some of the states have been pressing for it. I personally believe that there is a strong case to bring real estate into the GST. In the next meeting itself, we are addressing one of the problem areas or at least (having) discussion (on) it. Some states want, some do not. There are two views. Therefore, by discussion, we would try to reach one view.”
The finance minister said the move would benefit the consumers who will only have to pay one “final tax” on the whole product. “As a result, the final tax paid on the whole product in the GST would almost be negligible,” he said.
Jaitley said the reduction in eventual expenditure coupled with incentivizing people to enter the tax net may also help reduce the size of “shadow economy”. A 12% GST is levied on construction of a complex, building, civil structure or intended for sale to a buyer, wholly or partly. However, land and other immovable property have been exempted from GST.