Identifying real estate as the one sector where maximum amount of tax evasion takes place, finance minister Arun Jaitley said there was a strong case to bring it under the ambit of the goods and services tax (GST), as per news records. GST Council to Discuss Bringing Real Estate Under Its Ambit.
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.
“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,” Jaitley said as per records.
A 12% 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.
The finance minister said India had historically been one of the least efficient tax system in the world with an extremely small tax base.
“The government was able to trace out about 1.8 million people whose deposits are disproportionate to their normal incomes. And they are all to answerable to the law and pay their taxes,” he said, as per records.