Goods and Services (GST) Council will begin its two-day meet today in Guwahati. While cutting rates on 150-200 items under the 28 percent slab is on agenda, the Council is also likely to take up the proposal of bringing real estate under its umbrella.

Finance Minister Arun Jaitley has said that there is a strong case to bring real estate under the ambit of the new tax regime.

While delivering a lecture at the Harvard University, Jaitley had said: "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."

Currently, GST is levied on services related to realty. A 12 percent tax 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.

Another sector that may come under GST is power. Experts say that the move is to replace value-added tax (VAT) on state-level duty on electricity with SGST.

Besides these, the Council has been working to make GST filing simpler. The Council may also consider a proposal to allow filing of the summary GSTR-3B by businesses and doing away the requirement of three monthly returns — GSTR 1, GSTR 2 and GSTR 3. If not all, the facility may be allowed for medium-sized firms.

Talking about the positives of extending the indirect tax regime’s purview, Jaitley pointed out that this will benefit the consumers who will only have to pay one "final tax" on the whole product.

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

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

"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 tax payers has not been in terms of number of companies but individuals who are coming into the tax net," he said.

 11 Nov 2017, 07:31 AM