Real Estate Might Take Longer Time to Get included in GST Bracket
Deputy Chief Minister of Bihar and GST Council member Sushil Modi ruled out possibilities for inclusion of real estate in Goods and Services Tax (GST) in near future. He mentioned Real Estate would take “much longer time” to get included in GST bracket as it is “not that easy” though the council is slated to discuss about it in the next meeting.
“It is up to GST Council to decide. But I think it will take much longer time and it is not that easy. Let other things stabilise in the GST, then petroleum products and real estate,” he said, to a query about the possible timing on the inclusion of real estate in the GST ambit, at the India Today Conclave East here.
Modi, who is also Bihar’s Finance Minister, said GST Council would discuss about the real estate issues in the next meeting. In real estate, state levies such as stamp duty, registration charges, and property tax, which is a municipal levy, are currently outside the ambit of GST.
He said every state Finance Minister is concerned to protect their state revenue and the centre assured protection up to 14 per cent of revenue.
After the GST council’s Guwahati meeting in which the GST rates of 178 items were reduced from 28 per cent, the GST is stabilising, Modi said
Refuting the argument that the decision of pruning the number of items from higher bracket of GST rate to lower rates was taken in view of Gujarat assembly elections, he said: “88 per cent of small business in Bihar fall below Rs 1.5 crore (annual turnover). It is not the case for Gujarat.”
“In the earlier regime, the small businesses with below Rs 1.5 crore (annual turnover) were exempted from excise duty. Most of the small businesses were below less than Rs 1.5 crore cap. Now, all of them came to net of GST.”
On the hardships that the businesses have been facing in filing GST returns, he said, it would take some time to settle in the new indirect tax regime. “Earlier in the VAT (Value Added Tax) system, 40 per cent was online based and the rest was done manually. The GST is end-to-end automation.
In terms of compliance, the system would be simplified and in the coming two-three months, the GST compliance system would be less complicated and it would be easier for small businesses.
The issues related to GST rates on items have been resolved by more than 80 per cent and very few issues are yet to be resolved regarding the tax rates, he said.