Finance Minister Piyush Goyal on Sunday said he expected GST collections to exceed Rs 13 lakh crore in the current financial year and this higher revenue would provide headroom to cut tax rates. The interim finance minister said, "with more people coming under the tax net, and successful implementation of the e-way bill system, there will be scope for rationalisation of tax slabs."
Under the four-tier Goods and Services Tax (GST), which was rolled out on July 1, 2017, taxes are levied in the brackets of 5 per cent, 12 per cent, 18 per cent and 28 per cent. On top of the highest tax bracket, a cess is levied on luxury goods such as big cars and sin goods such as sugary drinks and cigarettes. "I assure you that the 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 here.
The Minister's projection came on a day when official figures showed GST revenue rising to Rs 95,610 crore in June from Rs 94,016 crore in May.
In the first year of GST in 2017-18, the government 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.
Goyal said historically the three months from April to June are lean periods of tax collection. In the earlier indirect tax regime 7.1 per cent of taxes used to get collected in the three months. "So Rs 94,000 crore collection is music to my ears,'' he remarked. The more people get into the honest and transparent system and with the success of e-way bill system, we will be in a better position to rationalise tax slabs. The different rate slabs were kept after considering the social structure of the nation....Is it proper to tax luxury cars and items of common items used by poor people? Goyal said.
The Minister also asked Finance Secretary Hasmukh Adhia to look into the option of allowing composition scheme dealers to file returns yearly, instead of the quarterly system at present. The small and medium enterprises can opt for the composition scheme which provides for a 1 per cent tax for traders and manufacturers while 5 per cent for restaurants.
The GST Council had last year decided to increase the turnover threshold for opting the scheme to Rs 1.5 crore and also decided to amend the law to increase the statutory threshold to Rs 2 crore. He also said that the Ministry would soon set up a system where businesses can discuss their problems relating to GST with revenue officials every month.
Finance Secretary Hasmukh Adhia said that Rs 1 lakh crore revenue is not the norm still. We hope to bring it (GST revenue) to the level of Rs 1 lakh crore every month. Adhia also said if bogus bills are not issued, then revenues would improve further in the coming months.
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