Union Finance Minister, Arun Jaitley, on Wednesday hinted about bringing real estate sector under the ambit of the current Goods and Services Tax (GST) regime.
The matter will be discussed in the next meeting of the GST, which will be held on 9 November, in Guwahati, Jaitley said, while delivering a lecture at Harvard University.
Under the present system, 12 per cent tax is leviable 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.
“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,” Jaitley said, while delivering the ‘Annual Mahindra Lecture’ on India’s tax reforms. “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,” he 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.
