GST lowered taxes on many
essential items compared to pre-GST rates
She
emphasized the GST collection crossing of ₹2 lakh crore and the
appointment of the President of the GST Appellate Tribunal (GSTAT) as a
significant milestone Union Finance Minister Nirmala Sitharaman shared a post
on social media on Monday and highlighted that GST (Goods and Services Tax) has
reduced the taxes on many essential items. The minister said, GST lowered
taxes on many essential items compared to pre-GST rates. Common items like hair
oil and soaps saw tax cuts from 28 per cent to 18 per cent. She also
highlighted the two recent achievements in the Goods and Services Tax (GST)
architecture.
She
emphasized the GST collection crossing of ₹2 lakh crore and the
appointment of the President of the GST Appellate Tribunal (GSTAT) as a
significant milestone.
In
her post, she also shared about the history of GST by crediting former PM Atal
Bihari Vajpayee led the NDA government for initiating the idea and credited PM
Narendra Modi for its implementation. She also highlighted the complexities of
India's pre-GST indirect tax system, emphasizing the fragmented market and
varied tax rates across states.
"Before
GST, India's indirect tax system was fragmented and complicated, and every
state was practically a distinct market in itself with different rules and tax
rates. Inputs for central excise duty, etc, could not be availed, leading to an
increased tax burden for the common people. - GST streamlined 17 taxes and 13
cesses into a 5-tier structure, simplifying the tax regime" said the post.
She also highlighted the positive outcomes of GST, including enhanced MSME
financing, reduced logistics costs through the E-way bill system, and increased
interstate trade.
Union
minister also emphasized the pro-poor approach of GST, with consistently
falling effective weighted average GST rates since 2017.
Furthermore,
Sitharaman stressed the cooperative federalism aspect of GST, empowering states
through the GST council's decision-making process. She debunked the myth that
all GST collections are pocketed by the Centre, highlighting the significant
contribution to state revenues.
"It
is a myth that all GST collections are pocketed by the Centre. GST contributes
significantly to state revenues - States receive 100 per cent of SGST collected
in that state, approx. 50 per cent of IGST (i.e. on inter-state trade). A
significant portion of CGST, i.e., 42 per cent, is devolved to the states based
on the Finance Commission's recommendations" said the post.
"Without
GST, states' revenue from subsumed taxes from FY 18-19 to 2023-24 would have
been ₹37.5 lakh crore. With GST, states' actual revenue amounted to
₹46.56 lakh crore" it further added.
The
Minister said "Despite the GST rate being less than the prescribed Revenue
Neutral Rate and COVID-19 affecting the revenues, GST collections (as a per
cent of GDP) have now reached the levels they were before GST (both net and
gross). This demonstrates that the Centre and States, collectively, through
better tax administration, are able to collect the same revenue with a lower
burden on our taxpayers".
At
the end, the post concluded by adding "GST is an expression of Modi Govt's
commitment to 'Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayaas'. Our
continuous efforts are towards ensuring that new heights are scaled through
better taxpayer services and increased efficiencies instead of increased
taxes". (ANI)
www.thehindubusinessline.com dt. 07-05-2024