Skip to main content

GST Council to take up real estate in November meeting

GST Council to take up real estate in November meeting
Aadahaar could be made manadatory for buying internationl air tickets,car
Realestate, a sector prone to tax evasion, might soon come under the goods and servicestax(GST) net.The GST Council would consider this at its next meeting on November10in Guwahati, finance minister Arun Jaitley said on Wednesday— early Thursday morning in India— at Harvard University.
While delivering a lecture on tax reforms in the country, he called the taxation system in India one of the least efficient in the world, with a very small tax base. He also hinted at making Aadhaar mandatory for buying a car or international air tickets in the future, taking a cue from the recent Supreme Court judgement.
The GST was rolled out on July 1, replacing a large number of indirect taxes with one unified tax of five rates.Petroleum, real estate, and alcohol were kept out of its ambit.“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.Ibelieve that there is a strong case to bring real estate into the GST,” Jaitley said.The stamp duty, which is outside the GST, has complicated the tax structure for real estate.
Alot of states had opposed the inclusion of the stamp duty in the GST, as it was asource of revenue for them.“Some states want; some do not.There are two views.Therefore, by discussion, we would try to reach one view,” hesaid.A12 percent GST is levied on construction of a complex, building, or civil structure intended for sale, wholly or partly.However, land and other immovable property have been exempted from theGST.If real estateis brought under the GST, the final tax would be almost negligible, Jaitley added.The FM is on a week long visit to the US, where he will attend the annual meetings of the International Monetary Fundand the World Bank.
Earlier, Jaitley had said bringing real estate under the GST was easier than petroleum.Jaitley said there would have to be some link between lifestyle and expenditure, and taxes paid, in the future.“Unquestionably and historically we have had one of the least efficient.tax systems[of] any country in the world.” The FM also spoke of making Aadhaar mandatory for buying cars or international airtickets.According to one judicial opinion, this might be treated as an exception to the law of privacy, keeping the revenue interests of the state in mind.
“You have 12-15 million cars being bought every year.You have 20 million people travelling overseas every year. And, if you compare it with the spending data, the base itself is extremely narrow,” he said.Jaitley also spoke on revenue collection under the GST and demonetisation.He said in the first month since the GST rollout, only 5.5 million people had filed returns and 40 per cent assessees had paid no tax. “So even now the habit of paying a marginal or negligible amount or not paying anything at all is quite prevalent.” About 95 per cent of taxes in the first two months had come from only 400,000 assessees.
The FM also described the note ban —in November last year —as a fundamental reform, necessary to make India a more tax compliant society.He added 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.”
The Businesss Standard, New Delhi, 13th October 2017
 

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit