Given the widespread opposition in the past, it is not clear if the GST Council will agree to bringing in both real estate and petroleum under the ambit of GST\u2014finance minister Arun Jaitley has said the Council will consider real estate next month\u2014but if it does, it will be a very big step forward. This will curb the use of black money in the case of real estate and, in the case of both sectors, it will free up thousands of crore rupees of input tax credits that get wasted each year right now\u2014to that extent, it will improve the liquidity of both real estate and petroleum. Right now, flats under construction are under the ambit of GST anyway and pay a rate of 12%\u2014the stamp duty differs from state to state and is in addition to GST\u2014but this does not apply to either the purchase of land or for buildings already constructed or to those being constructed for factories or offices for your own use. So, the flats being built and then sold by, say, a DLF pay a 12% GST right now, but the office complex being built by a DLF for putting on rent will not be under GST; nor will a refinery being built by an IOC or a deep-sea exploration project by an RIL-BP. In which case, while GST paid on cement\/steel and other inputs used to build the apartment complex will get rebated, this will not happen for either the office complex being put on rent or for the refinery or the exploration project. There are two implications of real estate being brought under GST. One, it will not be possible to spend your black money to buy land as happens today since this will be easily tracked in a post-GST scenario. Two, if stamp duty is subsumed into GST\u2014if it is not, input tax credit cannot be claimed on the stamp duty paid\u2014state governments will get their stamp duty on the first sale. But while states get a stamp duty each time there is a sale\/resale of a flat\/land right now, they will get more GST in each resale only to the extent there is value addition in these transactions. So, for Jaitley to be able to convince the states that they will benefit despite this, he will have to explain to the states that, since there will be no black component to land\/building transactions, the registered value will rise. If say, the GST rate is raised from 12% to 18% to accommodate the 6% stamp duty, states will get only half of this under the GST formula. But since this GST will be levied on a significantly higher base price, the states may not lose in absolute terms. Also, to the extent builders, and even oilcos, are able to utilise thousands of crore rupees of input tax credits, their financials will improve and that, in turn, will spur investment activity in the state; bringing petroleum under GST was one of the main demands of global and local oil majors that met prime minister Narendra Modi earlier this week if investment levels were to rise significantly. With many states and politicians opposed to the implications of bringing in real estate under GST, it is likely the discussion will be a long one, and may even extend over several sessions, but if it does, it will go a long way in giving India the complete GST it needs.