New Delhi: Revenue Secretary Tarun Bajaj Said on Tuesday that there is room for further pruning gst exemption list And expressed hope that the “hard edges” in the indirect tax regime would be removed in the next 2-3 years.
He further said that the increase in GST collection is due to several factors, such as increase in economic activity post-Covid, and better compliance, apart from inflation.
GST Council Last week it removed discounts on a range of goods and services, including pre-packaged and labeled food items, non-ICU hospital rooms above Rs 5,000 and hotel rooms below Rs 1,000. Further, charges for issuance of checks (in loose or book form) by banks and also on maps and charts, including atlas, will now attract GST.
In addition, services provided by regulators like RBI, IRDA, SEBI, FSSAI and GST Network Now GST will also be applicable.
“In the 47th GST Council meeting, we removed a lot of exemptions but the exemptions are still there. That needs to be worked out. On the services side, we still have a large number of exemptions. CBIC, GST Council, Sahyog Along with trade and industry, we will continue to work on that if we can narrow down this list of exemptions,” Bajaj said, adding that there will be certain categories like healthcare, on which exemptions will have to continue.
Addressing the CII session, Bajaj said that the GST Council had tried to address the issue of inverted duty structure (where tax on inputs is higher than levy on finished product) in the supply chain, in the case of mobiles and footwear and Efforts will continue for improvement in other areas as well.
“I am very hopeful and optimistic that if we can address some of the other rough edges in the next 2-3 years, we may see a lot of stability in tax rates,” Bajaj said. Monthly GST collections crossed the Rs 1.40 lakh crore mark for the fifth time since its inception in June and in the fourth month since March 2022. Gross GST revenue grew 56 per cent year-on-year to over Rs 1.44 lakh crore. June 2022.
Bajaj said there was a good jump in GST revenue in the last financial year and the GST Council, comprising finance ministers of the Center and states, is cautious not to pass on the burden of increased rates to the common man.
“Revenue is rising as inflation, real GDP, compliance and the economy is coming back with a vengeance in some sectors. Last year’s gross GST revenue was 30 per cent, while nominal GDP was 19.5 per cent. So there was a good jump. Not me. This jump seems to have come only because of inflation. But also because of compliance and formality,” Bajaj said.
The secretary said the 28 per cent slab in GST contributes 16 per cent to the gross GST revenue, while a major chunk of 65 per cent comes from the 18 per cent slab.
The slabs of 5 per cent and 12 per cent contribute 10 per cent and 8 per cent, respectively, to the total gross GST revenue.
“I don’t know if India is ready to go for a rate suggested by some. But maybe as time goes by, we keep improving the reverse duties, and get rid of the exemptions, I think. “Maybe these 5 cent, 12 cent cent and 18 per cent can be the first to go into the two rates,” Bajaj said.
Under GST, a four-rate structure that exempts or levies a lower rate of 5 percent on essential goods and a top rate of 28 percent on cars. The other slabs of tax rates are 12 per cent and 18 per cent.
In addition, there is a special rate of 3 per cent for gold, jewelery and precious stones and 1.5 per cent on cut and polished diamonds.
Also, cess is levied on the highest tax slab of 28 per cent on luxury, sin and demerit items. The collection from the cess goes to a separate fund – the Compensation Fund – which is used for revenue loss to the state due to the rollout of GST.
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