You are here: Home » PTI Stories » National » News
Business Standard

Govt to discuss bringing real estate under GST in Nov: Jaitley

Press Trust of India  |  Washington 

The issue of bringing real estate under the GST's ambit will be discussed next month, Minister said today, as he acknowledged that it is the one sector where maximum amount of evasion and generation takes place.

The matter will be discussed in the next meeting of the Council to be held on November 9 in Guwahati, Jaitley said while delivering the 'Annual Mahindra Lecture' on India's reforms at the prestigious University.


"The one sector in where maximum amount of evasion and generation takes place and which is still outside the 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.

The Goods and Services (GST) was implemented from July 1 this year. It brings the economy under a uniform regime.

"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, Jaitley said.

"As a result, the final paid on the whole product in the would almost be negligible," the minister said.

Jaitley said the reduction in eventual expenditure coupled with incentivising people to enter the net may also help reduce the size of "shadow economy".

A 12 per cent 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 the

On demonetisation, Jaitley said it was a "fundamental reform" which was necessary to transform into a more tax-compliant society.

"If you see the long-term impact of it, demonetisation brought in more digitised transactions; it brought the issue to the centerstage. It expanded the individual base. It compressed the currency by three per cent which was operating in the market.

"Those objectives are for the long-term. No doubt there are short-term challenges, but (necessary) for transforming from a non-compliant to a more compliant society," he said.

The minister said had historically been one of the least efficient system in the world with an extremely small base.

"Frankly, over the last several decades, serious efforts, real efforts to expand this base had not been made. You had marginal efforts," he said, adding that systematic efforts to challenge the "shadow economy" were made only recently.

"In the last few years, the bulk of the increase in payers has not been in terms of number of companies but individuals who are coming into the net," he said.

Jaitley said some people had "misunderstood" the objective of demonetisation "which wasn't to confiscate somebody's currency".

"Obviously if somebody has currency and deposits in the bank, it does not become lawful holding. They still have to account for it. Therefore, the anonymity which was attached to a currency came to an end and that holding got identified.

"The government was able to trace out about 1.8 million people whose deposits are disproportionate to their normal incomes. And they are all answerable to the law and pay their taxes," he said.

Jaitley is on a week-long stay in the US, during which he will participate in annual meetings of the IMF and the World Bank.

The Indian real estate market is expected to touch USD 180 billion by 2020. The housing sector alone contributes 5-6 per cent to the country's Gross Domestic Product (GDP), according to Brand Equity Foundation, a Trust established by the Department of Commerce, Ministry of Commerce and Industry.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, October 12 2017. 13:22 IST
RECOMMENDED FOR YOU