1. CA. RAJAT MOHAN Goods & Services Tax BY FAR THE MOST IMPORTANT TAX REFORM IN INDIAN HISTORY - Sectoral Analysis

2. CA. RAJAT MOHAN Real- Estate Sector The real estate sector should be integrated into the GST framework. Stamp duty on immovable properties is also to be subsumed in GST.

3. CA. RAJAT MOHAN Real- Estate Sector (cont.) The new GST regime for immovable property transactions would be as follows:-  The GST should apply for all newly constructed property (both residential and commercial).  If it is self-used by the person who constructed it, the GST should be applied on the cost of construction.  However, if it is sold or transferred, the GST should be applied on the consideration received at first transfer or sale. In both cases, credit should be allowed in respect of input tax paid on raw materials used in construction.

4. CA. RAJAT MOHAN Real- Estate Sector (Contd.)  Rental charges received (excluding imputed rental values) in respect of leasing of immovable property used for both residential and commercial purposes should be charged to GST.

5. CA. RAJAT MOHAN Real- Estate Sector (Contd.)  All secondary market transactions in immovable properties (whether constructed before or after the introduction of GST) should be liable to GST.  If the property has been constructed after the introduction of GST, the GST should be levied on the resale value and input tax credit should be allowed in respect of the GST paid upon construction or purchase of the property after making adjustment for inflation.  If the property has been acquired by the seller before the introduction of GST, the GST should be levied on the difference between the sale price and the cost of acquisition and improvements thereto. In such cases, no input tax credit would be allowed.

6. CA. RAJAT MOHAN Real- Estate Sector (Contd.) Input tax credit Input tax credit would be allowed only in respect of input tax paid on goods and services used for maintenance. No input tax credit should be allowed in respect of tax paid on construction or acquisition of the property or tax paid on improvements thereto.

7. CA. RAJAT MOHAN Power sector  The tax regime for the power sector should be the same as in the case of any other normal good.  The electricity duty levied by the States should be subsumed in the SGST.  Article 278 and Article 288 of the Constitution should be amended to enable levy of GST on supply of electricity to Government at all levels like any other normal good.

8. CA. RAJAT MOHAN Tax on vehicles and the tax on goods and passengers  The tax on vehicles and the tax on goods and passengers levied by the State Governments should be subsumed in the GST.  All transport equipments and all forms of services for transportation of goods and services by railways, air, road and sea must form an integral part of the comprehensive GST base recommended by us over which both the Central and State Governments would have concurrent jurisdiction.  The tax regime for the transport equipments and transport services should be the same as in the case of any other normal good.

9. CA. RAJAT MOHAN Financial Services The consumption of financial services should be comprehensively taxed under the GST framework on the basis of full taxation method.

10. CA. RAJAT MOHAN THANK YOU Your comments and suggestions are of utmost importance and are always welcomed. Contact person: CA Rajat Mohan Partner Ph: 9910044223