Real Estate Likely To Be Brought Under GST Regime Soon
New Delhi: As part of the crackdown on the parallel economy and in a bid to bring transparency in the real estate sector, the GST Council meeting at Guwahati is likely to take a decision to bring the real estate sector under the GST regime. The issue is being deliberated today by the officials and a final shape is expected to be given during the Ministerial meeting of the GST Council which is scheduled to be held tomorrow (Friday).
The officials are trying to fix not only the rate at which GST will be imposed on the real estate sector but also to deliberate whether registration of property would invite stamp duty separately or shall it be subsumed into the GST regime. At present, various states charge different rates of stamp duty on property registration but majority of them give a special discount in the rates if the property is being registered in the name of a women. Similarly, following the submission of the report by a Ministerial group to study the rationalising of GST rates and making them simple and compliant, the GST Council is likely to take out majority of the items from the 28 per cent category and shift them to the 18 per cent and 12 per cent category each. There could be relief for consumers eating out in restaurants as the GST Council is likely to bring down the rate from 18 per cent to 12 per cent category. Also, it is expected that lot of other items under the 28 per cent regime will be shuffled to lower rates including textiles and fabrics.
The government is of the view that real estate is one sector where maximum amount of tax evasion and cash generation takes place. It is understood that a number of states have backed the move to bring real state under GST regime but some others are against such a move. The Congress state ruled Chief Ministers are expected to push for abolition of the 28 per cent category and cap the GST rate at 18 per cent maximum.
Speaking about the GST Council meeting, Saloni Roy, Senior Director, Deloitte Haskins & Sells LLP said: The move to introduce GST was a historic step. There have been hiccups in its implementation. Concerns have been raised by various sectors of the economy, but the silver lining is that Government has adopted a positive approach and its taking action to ease the pain. It is expected that the GST Council meeting scheduled for today and tomorrow would bring relief to small and medium enterprises in terms of simpler GST filing norms. Also, reduction in tax rates for several items under the 28 per cent tax bracket along with rationalization of tax rates for daily use items is anticipated. GST Council is also looking at attending to issues of trade and industry with respect to higher rates of tax in respect of items which were subject to a lower rate under the pre GST regime.
There has been outcry and unrest among traders and businesses over the complex GST regime and the high GST rates. The difficult in compliance has also come in for strong criticism forcing the government to have a relook at the whole issue on a war footing. The Prime Minister, Narendra Modi has also promised that next GST Council meeting will end the pain of GST for traders and make things simple including giving relief in shape of reduction of higher tax regime.
With the Assembly elections scheduled in Gujarat for next month, the Government is keen that the unrest among trading and business community needs to be addressed on a war footing and that is one of the reasons that Mr. Modi himself came out to reassure the traders that their grievances pertaining to the GST regime will be addressed soon.