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Officers' committee did not recommend any GST rate hike: FM Nirmala Sitharaman

Manish Sisodia said that rates were reduced two years ago and if rate reduction was the reason for fall in revenue collection then it should have happened immediately

twitter-logoDipak Mondal | December 19, 2019 | Updated 16:52 IST
Officers' committee did not recommend any GST rate hike: FM Nirmala Sitharaman

The much-talked about report of committee of officers on revenue augmentation did not suggest directly or indirectly any increase or reduction in GST rates, Finance Minister Nirmala Sitharaman clarified after the 38th GST Council meeting yesterday.

"It was an officers' committee which consists of both central and state officers. They have just come up with a rough first-cut report consisting of data since the time GST was implemented till today. The report made revenue projections based on different growth rate. The Council and the ministers agreed to mull over it for sometime and come back," said the finance minister.

There were reports that the committee of officers set up to look at ways for revenue augmentation has suggested increase in the GST slab rates, and that they wanted the 5% slab to be increased to 10%.

However, many states have opposed the move to increase GST rates saying this is not the right time to do so.

TS Singhdeo, minister of commercial tax, Chhattisgarh, said that we do not fully agree with the report presented by the committee of officers, and the basis of their calculations.

He said that the many members of the Council are of the opinion that the government must first see the impact of rate reductions and their impact on tax base and revenue collection. TS Singhdeo said that any tax hike must be the last resort.

Delhi's Deputy Chief Minister Manish Sisodia said that rates were reduced two years ago and if rate reduction was the reason for fall in revenue collection then it should have happened immediately.

The council members have asked the committee of officers to provide more data on the impact of reduction of GST on the tax base and revenue collection before they can further discuss the issue.

One member of the Council wanted the committee to compile data of all the goods, whose rates were reduced, and the impact on tax base and also revenue collection after reduction.

Some members also asked the committee to include in its report the impact of use of technology in plugging the leakages and improving compliance.

Also read: Why GST Council broke its tradition of taking decisions unanimously

Also read: GST rate hike not the answer, rationalisation is key: CII president

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