The matter will be discussed in the next GST council meet on November 9 in Guwahati
In a move to combat tax evasion in the real estate sector, Union government is set to hold discussions with the state governments to bring the sector under the ambit of the GST.
Speaking at the ‘Annual Mahindra Lecture’ in the Harvard university on Thursday, Finance Minister Arun Jaitley said that there was a strong case to bring the real estate sector under the ambit of GST as maximum tax evasion happened in that sector.
“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.
Jaitley further said that the matter will be discussed in the next meeting of the GST. “In the next meeting (November 9) 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.
If the sector is brought under GST, Jaitley said, the final tax on the whole product will significantly come down thereby ultimately helping the consumers.
Currently, a 12 per cent 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.
Jaitley, during his lecture, defended demonetisation and GST while claiming that the growth figures from the current quarter will keep on improving in the next few years.
“The economy is doing reasonably well, but can do much better. Important structural changes can have a transient impact, which they have had but all indications are that things are improving and will improve,” Jaitley said.
Jaitley is on a week-long visit to the US, during which he is scheduled to participate in the annual meet of the IMF and World Bank.