New Delhi: FM Jaitley on Monday hinted that the govt may soon bring real estate and natural gas under GST, to be followed by a similar move with regard to diesel, petrol, and potable alcohol.
“So far the mood of most states is not to include petrol and diesel in GST. I am sure as the GST experience moves on, I think natural gas And real estate which includes land. these are areas which are to be brought in and then probably at some stage we will try for petrol and diesel and then, of course, potable alcohol,” Jaitley said, addressing a post-budget event organized by industry lobby Federation of Indian Chambers of Commerce and Industry (Ficci).
Any such decision will need to be cleared by the GST Council which includes FM of all states and the central government.
Since the implementation of the indirect tax on 1st July, the GST Council has been taking steps to reduce compliance difficulties, cut tax rates on various items, and simplify the processes under GST regime.
Worried about revenue loss, states are not in favor of inclusion of diesel, petrol, alcohol and real estate under GST.
Jaitley assured the audience that the target of 3.3% of GDP(Gross Domestic Product) in the revised fiscal deficit would be much easier compared to the current year, even higher due to the implementation of Mega Health Insurance Scheme With the demand of expenditure and the rise in minimum support prices, high tax boom and rapid economic growth
“Hopefully, tax buoyancy will be higher next year. I do hope higher growth is back. We can look to the next couple of years to start reaping the benefits post the structural reforms,” he said.
Jaitley said the fiscal slippage in 2017-18 was 30 basis points, from 3.2% of GDP to 3.5% was statistical in nature. “When people comment on the fiscal decline in the current year, they easily forget the fact that it is 12 months of expenditure and only 11 months of GST. The cycle will be completed and it will be 12 months of GST, s, revenue of Rs 36,000 crore is missing in the 12th month, which is only for a significant part of 30 basis points this year.
While under the old regime, indirect taxes like excise duty and service tax used to be paid in the month in which the transaction took place, under GST, businesses only pay taxes the following month. So for the current financial year, the March GST will be paid in April.
The finance minister said several challenges got compounded in the current year. “Non-tax revenue had a setback from spectrum auction, lower public sector and Reserve Bank of India dividends. We covered that up significantly through higher disinvestment. One miss which we could not cover was that the accounting system changed to GST,” he added.