Mumbai: The central exchequer has been vociferous in wanting to bring real estate under the ambit of Goods and Services Tax. Even as the Centre tries to bring a consensus on states on this, ET NOW learns from sources that the government is seeking law ministry’s opinion on the inclusion.
According to sources, the government will sought the law ministry’s opinion to understand whether there is a need to make any sort of constitutional amendment. Sources say the government fears that the states may not allow inclusion of property tax.
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Finance Minister Arun Jaitley has been talking about the need to bring real estate under the GST ambit. In fact, it is important to know that in the last GST council meeting that took place in Guwahati, the GST council was supposed to see a presentation regarding the same but couldn’t do due to the lack of time.
However, it is learnt that government is moving in that direction and is working on the consensus building that will go in this whole exercise.
So far, works contracts are under the goods and services tax but real estate as a whole has been out of it. The Centre may also keep agricultural land out of GST ambit.
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Speaking exclusively to ET NOW Kerala finance minister, Thomas Issac said the state is totally opposed to including real estate under GST.
“The present constitutional amendment did not cover real estate and stamp duty continues to be within the domain of the state tax. We are unwilling to surrender any further taxation right to the GST council or to the Centre,” he said.
The Associated Chambers of Commerce and Industry of India (Assocham) recently said that if the real estate sector is brought within the ambit of GST, it should be along with the stamp duty and moderate rate, and should not add to the cost of housing and construction.
The industry body said the Centre is certainly in favour of realty under the Goods and Services Tax (GST) but the states have to be brought on board because there are revenue implications.