Finance Minister Mr. Arun Jaitley announced that the GST Council will meet next month to discuss the inclusion of real estate under GST. He also acknowledged that real estate is a sector which has the most amount of cash generation and tax evasion.
The meeting is to be held in Guwahati on 9 November 2017. The problem areas will be addressed and discussed. While some states in the country have urged that real estate come under the ambit of GST, other states have been weary of it. Jaitley stated that there are two views on the matter, and both views will be taken into consideration. However, there is a strong case for bringing real estate under GST.
According to Jaitley, in his recent speech at Harvard University on India’s tax reforms, the move to include the real estate market under GST would be beneficial for consumers, who in turn will have to pay a single “final tax” on their purchase. The tax on the whole product would be close to negligible under GST.
Jaitley also spoke on demonetisation terming it a “fundamental reform” which was required to make India a more tax-compliant nation. Though there are short-term challenges, the objectives of the scheme are for the long term. Historically, India has had an extremely small tax base and the tax system has not been efficient. For several decades, the efforts towards transforming India’s tax system have been marginal. Only in the recent past have there been serious efforts made to tackle the “shadow economy”.