Business

GST to be effective on Real estate

The Real estate market is one of the worst sectors when it comes to tax evasion. The government of India has finally able to realize the issue in real estate business and have decided to move it under the Goods and Services tax GST. The finance minister of India Arun Jaitley mentioned in Harvard University United States that in November 2017 meeting at Guwahati they are going to discuss the indirect tax regime with the GST Council.

According to Arun Jaitley, the taxation system in India is very weak and not effective at all because of its weak base. According to him, Aadhaar should be mandatory when purchasing international airlines tickets. Goods and Service tax started on July 1, 2017, where a single tax was levied instead of a number of indirect taxes. Things like Petroleum, Alcohol and Real Estate was kept out of the chain.

Real Estate is one of the places where tax invasion takes place the most but still it is not under the GST guidelines. This was only done because real estate has a stamp duty and a lot of states in India generate a lot of revenue from the stamp duty and are not willing to support GST in Real Estate. Some of the states are supporting for GST, and therefore it has been the reason to be left out of the GST loop.

The importance of an Aadhaar Card can be seen now. The government is trying to make the aadhaar mandatory when it comes to buying cars and international airlines tickets. According to the finance minister, there are about 20 million people traveling abroad every year and about 12-15 million cars sold every year and keeping track of the data is very important and aadhaar card will be the only way to keep track of the data.

Since GST started from July 2017 5.5 million people have filed tax returns and just 40 percent of the people, have not paid any taxes.  The ban of currency notes in November last year has been able to make India a more tax-compliant society and tax invasion could be checked. According to the statistics about 90 percent of the taxes that were paid after July 2017, there were about 400,000 assesses in the first two months. According to Jaitley, there should be a link between expenditure and lifestyle and taxes being paid in the future to keep the tax system more compact.