Prices to come down 20% if realty is included in GST

At a time when the Union Government and the states are engaged in a hectic parley on the thorny issue of goods and services tax (GST) regime, 13th Finance Commission chairman Vijay Kelkar is of the opinion that inclusion of the real estate sector in the proposed goods and services tax (GST) regime is likely to cut property prices by a around 20 percent. According to the GST regime, the whole country is sought to be converted into a single market.

Batting strongly for the inclusion of the real estate sector in the GST, Mr Kelkar said the present system of levying stamp duty on property deals will go away once realty is included in the GST. He said internal studies done by the finance commission point out that the prices for consumers will come down by 15 to 20 percent if the realty is included in the proposed GST regime.
The former finance secretary's comments assume significance ahead of the Union Budget to be tabled by finance minister Pranab Mukherjee in the Parliament in the second week of March. The Finance Minister will present the Union Budget on March 16 and the finance minister is likely to present a roadmap for the roll-out of GST.
He also pointed out that the original report of the 13th Finance Commission calls for inclusion of real estate sector in the GST's ambit.