Increased GST revenue collection should now be the ‘new normal’: Sitharaman
Lauding taxpayers for the enforcement measures in tackling GST fraud, Finance Minister Nirmala Sitharaman on Thursday said the growth in revenue collection in recent months should now be the “new normal”.
In a message to tax officials on the fourth anniversary of the historic tax reform GST, he said the taxpayer base has almost doubled from 66.25 lakh to 1.28 crore in the last four years.
She said that in eight consecutive months, GST revenue has crossed Rs 1 lakh crore and we have seen a record GST revenue collection of Rs 1.41 lakh crore in April 2021.
Sitharaman said, “A commendable work has been done in the field of both facilitation and enforcement in the last year, with several cases of fraudulent dealers and ITC being registered. The increased revenue collection in recent months should now be the ‘new normal’ “
A nationwide GST, consisting of 17 local levies such as excise duty, service tax and VAT and 13 cess, was launched on July 1, 2017.
Expressing satisfaction over most of the GST implementation challenges, including the two waves of the COVID-19 pandemic, the Minister thanked taxpayers for their support in making the Goods and Services Tax (GST) a reality.
“Its positive externalities such as integrated markets, removal of cascading and impact[roved competitiveness of goods and services has helped spur economic growth taking us further on the path to prosperity,” she said while commending both the central and state tax officers for making GST a success.
Central Board of Indirect Taxes and Customs (CBIC) will be issuing certificate of appreciation to 54,439 GST payers for timely filing of returns and cash payment of GST in the last four years. More than 88 per cent of these taxpayers are from micro, small and medium enterprises.
She said any reform of this scale, in a large and diverse country like India, can be highly challenging.
“The GST Council has shown immense sagacity and wisdom in redressing legitimate concerns of taxpayers and citizens by course correction whenever needed. This has manifested itself not just in measures to ease the compliance burden on taxpayers, especially MSMEs, but also reducing the tax burden on the common man,” Sitharaman added.
Under GST, businesses with an annual turnover of up to Rs 40 lakh are exempt from GST. Additionally, those with a turnover up to Rs 1.5 crore can opt for the Composition Scheme and pay only 1 per cent tax.
For services, businesses with turnover up to Rs 20 lakh in a year are GST exempt. A service provider having turnover up to Rs 50 lakh in a year can opt for composition scheme for services and pay only 6 per cent tax.
Under GST a four-rate structure that exempts or imposes a low rate of tax 5 per cent on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent. In the pre-GST era, the total of VAT, excise, CST and their cascading effect led to 31 per cent as tax payable, on an average, for a consumer.
GST also represents an unprecedented exercise in fiscal federalism. The GST Council, that brings together the central and state governments, has met 44 times to thrash out how the tax will work.
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