Massive GST collections set to bring good news for common man

The government will look at reducing tax rates as well as tax slabs as the goods and services tax (GST) collections rise significantly. A large number of items will be shifted from 28% to lower tax bracket first. “Now we’ll be busy in the process of shifting a large number of items from 28% to lower rates,” said Union minister Arun Jaitley addressing a function to mark  the first anniversary of the indirect tax reform through video conferencing here in the capital on Sunday. 

Finance minister Piyush Goyal exuded confidence that GST collections will exceed Rs 13 lakh crore in the current fiscal and there will be further scope to rationalise the tax rates.

Jaitley said with more number of people coming under the tax net, and successful implementation of eway bill system, there will be scope for rationalisation of tax slabs.“As the tax collection goes up, the capacity to rationalise the slabs, the capacity to rationalise the rates, also will certainly increase. Therefore, that capacity to rationalise will increase once the total volume of tax collected significantly increases,” Jaitley said in his first public address in two months after undergoing a kidney transplant.

“Once you have a more efficient tax, that more efficient tax system will ensure that evasion doesn’t take place,” he said. Jaitley observed that implementation of GST in the country was not disruptive and the best was yet to come.

A single tax slab was, however, not advisable in the current economic situation, he said. Under the existing four-tier GST, taxes are levied in the brackets of 5%, 12%, 18% and 28%, while a cess is levied on luxury, sin and demerit goods on top of the highest tax bracket.

Jaitley said that GST has not only impacted the indirect tax collections it has also led to an increase in the direct tax collections for the first quarter fiscal.

So the “GST not only impacts the indirect taxation, but also those who have to disclose their turnover now for the purpose of GST and necessarily to pay the direct taxes. ”

Interim FM Piyush Goyal said that GST collections will exceed Rs 13 lakh crore in the current fiscal and with increased revenues, there will be further scope to rationalise the tax rates.

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“I assure you that average monthly GST collection will cross Rs 1.10 lakh crore. I feel more than Rs 13 lakh crore revenue will come from GST this fiscal,” Goyal said at the ‘GST-Day’ celebrations.

In the first year of GST, the govt has earned Rs 7.41 lakh crore from the tax since its roll out in July. The average monthly collection was Rs 89,885 crore. In the current fiscal, the collections in April touched a record Rs 1.03 lakh crore. Announcing the June figures, finance secretary Hasmukh Adhia who was also present on the occasion said, “It’s (Rs 1 lakh crore) not the norm still. We hope to bring it (GST revenues) to the level of Rs 1 lakh crore (every month).”

Source: DNA Money