Finance Minister Arun Jaitley on Wednesday attended an event organised at his alma mater Harvard University where he delivered a lecture covering various aspects of Indian economy as well as the policies of the Narendra Modi government. Jaitley started off his speech talking about the recently implemented Goods and Service Tax (GST) by the Central government. “The move would benefit the consumers who will only have to pay one ‘final tax’ on the whole product. As a result, the final tax paid on the whole product in the GST would almost be negligible,” Mint quoted him saying. The Finance Minister who is currently in the US, further said that the reduction in eventual expenditure coupled with incentivising people to enter the tax net may also help reduce the size of shadow economy in the country. Later on, he also informed that GST Council will bring in real estate under the new-tax ambit during the next meet which is scheduled to take place on 9 November.
“The one sector in India where maximum amount of tax evasion and cash generation takes place and which is still outside the GST is real estate. Some of the states have been pressing for it. I personally believe that there is a strong case to bring real estate into the GST,” Jaitley said while speaking at Annual Mahindra Lecture on India’s tax reforms. He also stated that 80 per cent of the revenue coming from the GST is going to the state governments.
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The senior Bharatiya Janata Party (BJP) leader also spoke about government’s demonetisation drive terming it as fundamental reform which was a must in order to transform India into a better tax-complaint society. “If you see the long-term impact of it, demonetisation brought in more digitised transactions; it brought the issue to the center-stage. It expanded the individual tax base. It compressed the cash currency by three per cent which was operating in the market,” Jaitley said.
Finance Minister Jaitley said that though both note ban and GST implementation were tough laws, they will have long-term benefits.