Kelkar suggests GST on housing, construction and rail transport

The proposed goods and service tax (GST) should cover infrastructural activities like housing, construction and railways so that the tax base widens and collections increase, according to the finance commission.

"I would urge that the construction and housing sectors be included in the GST tax base, either immediately or during a subsequent phase," said Vijay Kelkar, chairman of the thirteenth Finance Commission.

This is because the construction sector is a major contributor to the national economy and housing forms a dominant item in personal consumption expenditure, Kelkar told a seminar on GST organised by the Assocham.

The Railways is another major contributor to the national income and a major item in the personal consumption expenditure basket, he pointed out.

Indirect taxes levied on train travel would also go a long way in providing a level playing field for road and air transportation sector, he added.

Moreover, inter-state movement of goods through the railways can be easily tracked over the proposed IT network, which would benefit the Railways as well, he said.