GST Council meeting: The Goods and Services Tax (GST) Council is going to have an important meeting today. Various measures to increase revenue receipts can be considered in this meeting.
New Delhi: The Goods and Services Tax (GST) Council is going to have an important meeting on Wednesday. Various measures to increase revenue receipts can be considered in this meeting. Under the current GST rate regime, the discussion about the change in tax structure has intensified due to less revenue than expected.
Compensation payments to states are delayed due to reduced revenue receipts.
To compensate for the decrease in GST receipts, suggestions have been made to increase the GST rate and cess.
Some states including West Bengal, however, have opposed any hike in cess rates. The state government says that in the slowdown in the economy, consumers as well as industries are facing pressure in the functioning.
The GST Council headed by Finance Minister Nirmala Sitharaman has asked for suggestions regarding review of GST and Cess rates. In order to increase revenue receipts, the Council asked for suggestions on reviewing rates on various goods, rationalizing the rates to correct inverted tax structure, and compliance measures other than the measures currently being implemented to increase revenue receipts. Huh.
In a letter sent to Finance Minister Nirmala Sitharaman, West Bengal Finance Minister Amit Mitran has said that the states have received the letter from the GST Council. In this, suggestions have been sought from them to increase revenue collection. It said that suggestions have been sought to increase revenue collection, including bringing the goods exempted from GST, to the tax net.
Mitra wrote in the letter, ‘This is a very dangerous situation. At a time when both industry and consumers are going through a lot of trouble when there is a possibility of inflation rising without increasing demand and business, at any time, there is no change in the tax structure or imposing any new cess. will not fix. We should not tamper with it.’
Several prominent economists, including former Reserve Bank Governor Raghuram Rajan, have expressed fears that India may be reaching a period of sluggish economic growth and high inflation. There is a situation where, despite the slowdown in economic activity, inflation is becoming faster.
In November, retail inflation rose to a three-year high of 5.54 percent due to rising prices of food products. On the other hand, industrial production declined for the third consecutive month by 3.8 percent in October. Due to this, while there is sluggishness in the economy, on the other side, inflation is raising head. GDP growth reached a six-year low of 4.5 percent in the second quarter of the current financial year.
Amit Mitra said that instead of raising rates and imposing new taxes or cess, the GST Council should find ways to provide relief to industries so that these areas can overcome the current crisis. The solution to raising additional tax revenue will not be through tampering of tax rates but measures to evade tax evasion and fraud.
However, after complaints of delay in payment of revenue compensation to the states, the central government on Monday released a total amount of Rs 35,298 crore to the states. The GST regime came into force in the country on 1 July 2017. While implementing GST, the Center had assured the states to compensate the shortfall in their revenue.