Scope For Further Pruning Of GST Exemption List: Revenue Secy

Income Secretary Tarun Bajaj on Tuesday mentioned there’s scope for additional pruning of the GST exemption listing and expressed hope that the “tough edges” within the oblique tax regime will probably be ironed out within the subsequent 2-3 years. He additional mentioned that the rise in GST assortment is on account of a number of components, like elevated financial exercise post-Covid, and higher compliance, moreover inflation. The GST Council final week eliminated exemptions on a number of products and providers, together with pre-packed and labelled meals objects, non-ICU hospital rooms above Rs 5,000 and resort rooms beneath Rs 1,000.

Apart from, charges charged by banks for the problem of cheques (free or in e book type) and maps and charts, together with atlases, too would now appeal to GST. Additionally, the providers rendered by regulators corresponding to RBI, IRDA, SEBI, FSSAI and GST Community additionally would now appeal to GST. “Within the forty seventh GST Council assembly we’ve taken away lots of exemptions however exemptions nonetheless stay. Work must be carried out on that. On the providers facet, we nonetheless have a lot of exemptions.

The CBIC, GST Council, in collaboration with the commerce and trade, will proceed to work on that if we will prune this listing of exemptions,” Bajaj mentioned, including there can be some classes, like healthcare, on which exemptions must be continued. Addressing a CII session, Bajaj mentioned that the GST Council had tried to deal with the problem of inverted obligation construction (the place the taxes on enter exceed the levy on completed product) within the provide chain, within the case of cell and footwear and energy will proceed for correction in different sectors as nicely.

“I am very hopeful and optimistic that a number of the different tough edges if we will tackle in subsequent 2-3 years, we will see a good bit of stability in tax charges,” Bajaj mentioned. The month-to-month GST assortment crossed the Rs 1.40 lakh crore mark for the fifth time in June since its inception and the fourth month at a stretch since March 2022. Gross GST revenues rose 56 per cent year-on-year to over Rs 1.44 lakh crore in June 2022. Bajaj mentioned there was good buoyancy in GST income final fiscal and the GST Council, comprising finance ministers from the Centre and states, is cautious to not burden the frequent man with elevated charges.

“Revenues are going up due to inflation, actual GDP, compliance and economic system coming again after Covid with a number of the sectors coming again with vengeance. Final 12 months’s gross GST income was up 30 per cent, whereas nominal GDP was 19.5 per cent. So there was good buoyancy. I do not assume this buoyancy can come solely from inflation. But additionally due to compliance and formalisation,” Bajaj mentioned.

The Secretary mentioned the 28 per cent slab in GST contributes 16 per cent to the gross GST income, whereas the most important 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 eight per cent, respectively, of the overall gross GST income.

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“I do not know if India is able to go for one price as advised by some. However maybe as time passes by as we maintain correcting inverted duties, and eliminate exemptions, I believe, maybe these 5 per cent, 12 per cent and 18 per cent will be the primary to maneuver into two charges,” Bajaj mentioned. Beneath the GST, a four-rate construction that exempts or imposes a low price of tax of 5 per cent on important objects and a high price of 28 per cent on vehicles is levied. The opposite slabs of tax charges are 12 per cent and 18 per cent.

Apart from, there’s a particular 3 per cent price for gold, jewelry and treasured stones and 1.5 per cent on lower and polished diamonds. Additionally, a cess is levied on the very best tax slab of 28 per cent on luxurious, sin and demerit items. The gathering from the cess goes to a separate corpus — Compensation fund — which is used to make up for income loss suffered by the state as a result of rollout of GST.

(PTI)