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GST Rates Can Be Reduced Further As Tax Base Increases: Finance Secretary

July 27, 2020 admin Comments 0 Comment

GST rates can be reduced further once the tax base increases and everyone pays taxes properly, Finance Secretary Ajay Bhushan Pandey said on Thursday.

“Once the tax base increases and if we are able to enforce our tax laws and everyone pays taxes properly, there will be definitely scope for further reduction of taxes,” he said.

Addressing a session on ”Digitisation in Governance” at CAPAM 2020, he said the ultimate aim should be that to collect minimum taxes at minimum rates.
“The government should collect taxes which are absolutely necessary and to that extent, we need to increase our tax base,” he said.

Mr Pandey said the government is also working on reducing the number of forms under the GST.

He said that there were 495 forms in the pre-GST era with 17 different taxes which were levied by various states.

“After the introduction of GST, the number of forms have reduced to 17-18 and we want to further cut down the number of forms in GST,” he added.

He said that with IT-enabled platforms there is no inspector raj now and GST regime has become faceless.

Elaborating on the new measures for income tax assessment, including the faceless assessment of taxpayers, he said that the government is working on promoting self-compliance.

He added that the government is also working on providing tax profile of each taxpayer.

“We have all the information and if it can be shared in a secure manner, protecting the privacy of the individual, this will also help in securing loans from banks. The entire digital exercise is being undertaken across various government departments. We are making all that information available and providing it to each taxpayer,” Mr Pandey said.

He also said that all the information is getting integrated for the benefit of the citizens, including ease of doing business, ease of living and is enhancing capabilities.

Stressing on the importance of digitisation, Pandey said that India is the only country to have Aadhaar, Aadhaar-enabled payment system, direct benefit transfer scheme and UPI payment scheme. “Use of digitisation in governance has improved our speed, effectiveness, efficiency and capabilities,” he added.

He noted that in the last three months, Aadhaar-enabled transaction have crossed Rs 50,000 crore and UPI transaction has taken over debit card transaction and cash withdrawals.

Referring to the revenue trend, he said all figures are giving an encouraging signal that the economy is coming back on track sooner than what was being anticipated when the lockdown started.

Source: NDTV.

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Govt mulls GST rate cut for some sectors, assesses revenue impact

September 5, 2019 admin Comments 0 Comment

Amid increased pressure from the industry to reduce GST rate to boost demand for products like automobile, the government is assessing the impact on revenues if GST rate is reduced for some products. The GST Council, that decides GST rates, will have its next meeting on September 30 in Goa.

Currently, items like automobile, tyres, cement, air conditioners and large LCD televisions are in the 28% bracket. Automobiles also bear a cess, depending on the size of the vehicle, which increases the total tax incidence further.

According to a report in a leading business daily, the fitment panel is expected to meet shortly to consider suggestions given by some states as well as industry. The fitment panel comprises central and state officials.

“Issues are being examined in detail… Numbers are also being looked at,” the daily quoted an unnamed govt official as saying. According to the publication, some states favour GST rate cut for the auto and cement sector to boost demand for the products. Some state policymakers are of the view that a more radical view of the rate structure needs to be taken, for instance merging the 12% and 18% slabs into one.
The daily said while Punjab and West Bengal are in favour of reducing GST for automobile to help revive the economy, Kerala is opposing any such moves.

Worth mentioning here is that the Indian economy grew at 5% in the April-June quarter, a 25 quarter low. Private consumption expenditure slowed to 3.1%, an 18-quarter low, while manufacturing grew 0.6%. The auto sector, which is currently witnessing its worst-ever slowdown in a decade, contributes nearly 50% to the manufacturing output. So revival of the sector is crucial to boost economic growth and achieve the govt’s $5 trillion economy target.

So far, private consumption has been supporting GDP growth. But with private consumption expenditure falling to 3.1%, any revival plan hinges on Indians loosening their purse strings during the festive season, which is when the bulk of sales take place traditionally.

Tax experts say a reduction in GST rate does not necessarily lead to a reduction in collections as they stoke demand as well. “Given the economic slowdown, there is certainly a case for reduction in rates for a few sectors such as auto,” the business daily quoted Pratik Jain, national leader, indirect taxes, PwC, as saying. “This has been done in the past and worked more often than not. Of course, this has to be backed up with other economic stimulus (measures) as well,” he added.

For sectors such as real estate and railways, where input tax credit is restricted, there is a case for reduction in rates on key inputs, he said.

Source: Times-Now

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GST collection for the FY 2017-18 stood at Rs 7.41 lakh crore

April 30, 2018 admin Comments 0 Comment

Collections from the levy of the Goods and Services Tax (GST) stood at a provisional ₹7.41-lakh GST: GSTN crore for the year ended March 31.

The GST regime was rolled out on July 1, 2017, and therefore the total tax mop-up pertains to the nine-month period from July 2017 to March 2018.

A statement from the Finance Ministry said the total GST revenue collected between August 2017 and March 2018 was ₹7.19-lakh crore. “For (these) eight months, the average monthly collection has been ₹89,885 crore,” the statement said.

Thise collection includes ₹1.19-lakh crore of Central GST, ₹1.72-lakh crore of State GST and ₹3.66-lakh crore of Integrated GST.

The Integrated GST collections include the ₹1.73-lakh crore tax on imports and ₹62,021 crore of cess.

Commenting on the collections, Abhishek A Rastogi, Partner, Khaitan & Co, said, “The collection is below target as rate cuts were announced in the recent past and various refunds in the case of export and other cases have also been cleared. It is hoped that the compliance level will improve further and all the assessees registered will start paying taxes, thereby leading to improved GST collections in the new financial year.”

The SGST collection during the year, including the settlement of IGST, has been ₹2.91-lakh crore and the total compensation released to the States ₹41,147 crore.

The compensation is to ensure that the revenue of the States is protected at the level of 14 per cent over the base-year tax collection in 2015-2016. “The revenue gap of each State is coming down over (the) last eight months. The average revenue gap of all States for last year is around 17 per cent,” the statement added.

The Finance Ministry also noted that there has been “a progressive improvement” in the compliance level observed during the course of the year.

In July 2017, the portion of GST returns filed on time stood at 57.69 per cent. This improved to 66.81 per cent by December 2017 but dipped to 62.63 per cent in March 2018.

The cumulative compliance levels (percentage of returns filed till date) for initial months has crossed 90 per cent and for July 2018, has reached 96 per cent.

“There are State-wise variations in the compliance level observed till due date. However, including delayed filings, the State-wise compliance levels converge over a period of time,” the Finance Ministry statement added.

Parag Mehta, Partner at NA Shah Associates LLP, said, “Currently, there is stability in law for the past three months and the compliance level has also increased.”

With the GSTN system working smoothly and no hindrances for generating e-way bills, the compliance level should increase further, he added. “With many States also introducing the intra-State generation of e-way bills for movement of goods, evasion is bound to reduce and increase the revenue.”