NEW DELHI: Land and real estate should be brought under the GST regime to check money laundering and corruption, Chief Economic Advisor Arvind Subramanian suggested on Thursday.
Subramanian, who had authored a report on possible tax rates under the Goods and Services Tax (GST) for the government, suggested that the new indirect tax set-up should be clean with simple low rates and should include land and property as well as electricity.
“Stamp duty (on property registration) is separate and states can retain the right to have stamp duty. The sale of land and immovable property should be part of GST so that input tax credit can flow freely in the system,” Subramanian said at a conference.
Cashless economy means ‘less cash’ economy
Digital transactions are a parallel mechanism, not a substitute, for cash transactions and a cashless economy is actually a less cash economy as no economy can be fully cashless, Union Finance Minister Arun Jaitley clarified at the meeting of the consultative committee attached to the Ministry of Finance. He pointed out that the government is trying to encourage digitisation as much as possible because an excessive cash economy has its own social and economic costs and consequences. Jaitley said that cash can be gradually substituted through digital payments/transactions. Government is conscious of the need of the cyber security of high level to secure digital payments he said, adding that the RBI and government will ensure strong firewalls.
New schemes to incentivise e-payments
The government has announced two new schemes to incentivise digital transactions hoping that electronic payments will be adopted by all sections of the society, especially the poor and the middle class. The scheme will become operational with the first draw on 25th December, 2016 (as a Christmas gift to the nation) leading up to a Mega Draw on Babasaheb Ambedkar Jayanti on April 14, 2017. It will comprise of two major components, one for Consumers and the other for the Merchants: “Following demonetization, there has been a spurt in the digital payments across the country and both the volume and amount of money transacted through digital methods has seen manifold , said Amitabh Kant,” CEO Niti Aayog.