Government to discuss bringing real estate under GST next week- Is It the Right Time Now??
The issue of bringing real estate under the GST’s ambit will be discussed in the next meeting of the GST Council to be held on January 18 in New Delhi.
Finance Minister Arun Jaitley had earlier acknowledged that it is the one sector where maximum amount of tax evasion and cash generation takes place. As per Zee Media sources, states would still be impose tax on the sector even if it is brought under the ambit of GST.
Although Building cess would be merged into GST like any other cess, the GST Council may allow states to impose Stamp Duty and Property Tax on real estate, sources said. The Goods and Services Tax (GST) was implemented from July 1 this year. It brings the economy under a uniform tax regime.
A 12 percent 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 the GST. The all-powerful council also deliberate on these aspects in its meeting.
The Indian real estate market is expected to touch USD 180 billion by 2020. The housing sector alone contributes 5-6 percent to the country’s Gross Domestic Product (GDP), a report by India Brand Equity Foundation, a Trust established by the Department of Commerce, Ministry of Commerce and Industry said couple of months ago.
|Author’s Note:- The Above step can be Bad for the Industry which is already reeling under High Tax structure, Anti Profiteering and RERA Implications. If the GST is imposed on Land and Properties which are not currently taxable under GST, a Simultaneous removal of Stamp Duties and property taxes should also be explored. If all taxes remain and this is further added, it can dent real estate already drowning sector more.
CA Ankit Gulgulia (Jain)