GST Clouds Roving Over Real Estate
At the onset, some of the fattest and most cash-bloated sectors were kept out of the GST ambit – electricity, alcohol, petroleum, real estate etc. However, the finance minister, Mr. Arun Jaitley, recently, while speaking at the Harvard University in US, hinted that the government is earnestly re-thinking to get the most cash rich and utmost tax evading sector in the GST arena soon – The Real Estate. The 23rd GST Council meeting in Guwahati next month, in November’17 will surely witness deep discussions around it, leading to the much needed clarity, provisions and announcements towards it.
Mr. Jaitley in his speech on tax reforms was quite open and upfront about the Indian taxation system, being the least effective in the world due to a meager tax base so far, which is now changing patterns and widening though. He was quite optimistic and sure to bring the real estate/stamp duty into the GST mechanism, following the pressure from the different states and echoed that there are strong, logical, social and legal reasons, which contribute towards having a strong reason to think so.
A lot many states, which were pumped in by the hefty revenues of the stamp duty are strongly advocating to include it in the GST and find it complicating, confusing and unrealistic now and have their regional logics and facts backing up. Though some states do not buy this version and are okay and in sync with the present exclusion. The GST Council meeting in November would decide on all the pros and cons, effects and disaffects and would mutually arrive at a consensus with the best brains on economics, taxation and industry experts on board.
Currently, the construction industry attracts 12% GST on structures intended for sale. However, the land/immovable property, which when brought under the GST sphere will make the final tax component almost petty.
Mr. Jaitley thinks that bringing real estate into the new GST module is simpler than to GST-fy the petroleum sector. He sounded firm on his mindset to have real estate GST-fied.
As reported in Business Standard.