- 1% tax hike can mop up Rs 1, 000 crore additional revenue every month
- Hike to affect food items, clothing, footwear and essential commodities
Hyderabad: The BJP-led NDA government at the Centre is in the process of restructuring Goods and Services Tax (GST).
The objective behind the rejig may not be to simplify but to enhance revenue volume. The Centre is reportedly considering a plan to increase the tax rate from the existing slab of five per cent to six per cent. The present slab covers essential commodities, food items, clothing and footwear. The proposed one per cent tax rate increase may fetch an additional Rs 1,000 crore revenue every month. The five per cent slab accounts for about five per cent of the total GST collection.
The current GST structure comprises five per cent, 12 per cent, 18 per cent and 28 per cent slabs. The Centre is often falling short of its target of Rs 1.18 lakh crore. For over six months, the monthly revenue volume was below Rs one lakh crore.
The next GST meeting is scheduled for December 18. Union Finance Minister Nirmala Sitharaman is Chairperson of GST Panel, which comprises finances ministers of all the states. The agenda for the next meeting includes tax structure review, compensation of cess rates and other items under the exemption. All the States will submit their recommendations before the meeting.
Ms Sitharaman has called for suggestions on measures to simplify the returns filing process under the GST regime. The Central and State GST authorities had organised a nationwide ‘GST Stakeholder Feedback Diwas’ on Saturday.
The Centre has invited all the GST registered dealers to provide suggestions to the nearest offices across the country.
People with suggestions can approach GST offices across the country. She said: “The focus of the occasion would be on assessing the ease of compliance and uploading of these new returns so that the trade does not face any difficulty when the returns are made legally mandatory. These feedback sessions would be attended by all prominent chambers of commerce and industry and other organisations representing taxpayers and tax practitioners compliance managers.”