Telangana opposed inclusion of real estate sector, petroleum products into the gambit of Goods and Services Tax (GST). Participating in the GST empowerment committee meeting at New Delhi, state finance minister Etala Rajender ruled out giving away these ‘cash cows’ to the Centre. He requested inclusion of any new good or service in GST purview should happen only after stabilization of the new system.
At present, taxation of land and buildings is under state governments ambit as per Schedule VII of the constitution.and stamp duty and registration fee continues to be one of the major sources of tax income for states.
“Telangana earns over ₹3,000 crore through stamp duty and registration fee every year. States will have to stop collecting it and share 50% of the revenue with Centre if the realty sector is brought under GST,” said a senior official.
While the Centre is bent on checking black money from realty, Telangana officials opined the move cannot check black money due to variations in land rates. The government rate at which the stamp duty is paid by realtors varies considerably with the market value for which actual transactions takes place.
“The meeting did not take any decision with majority of states opposed including stamp duty and petroleum products in purview of GST,” V Anil Kumar, commissioner of commercial taxes told TOI after the meeting.
The meeting also discussed about compensation to be paid to the states. State demanded exclusion of value added tax collection while calculating annual growth rate. Decision on this was deferred as Centre wants to refer this matter to Niti Aayog .