In the next meeting of GST Council, the tax slabs are expected to rise on the various products to tackle the pressure of revenue shortfall. It is being told that in a sluggish economy, the government can take this step to increase revenue. The GST Council meeting is scheduled for 18 December and headed by Finance Minister Nirmala Sitharaman. According to 2019 GST reports, there is a decline in the GST collection. Apart from this, due to low tax collection, now the Center is now paying about Rs 13,750 crore as compensation to the states every month.
There are currently four slabs of GST -5 per cent, 12 per cent, 18 per cent and 28 per cent. A cess is also levied on items falling in the 28 per cent tax slab, which can be between 1 and 25 per cent. Central and state government officials held a meeting on Tuesday. Recommendations have been made in this meeting that the 5 per cent tax slab may be increased to 8 per cent. According to a few sources, it was found that the tax slab of 12 per cent can go up to 15 per cent.
Many items may come under the tax net
There may also be a discussion on cess on services during the GST Council meeting to reduce the burden of compensation. According to sources, three slabs can also be made by merging some slabs. Apart from this, items which are not subject to GST and can be also brought under the tax net. According to government data, the central GST collection was 40 per cent lower than what was estimated in the budget during the April-November period.
GST collection below estimate
The central GST collection stood at 328365 crores from April to November as against the budget estimated at 5,26000 crores. GST collection of 4.57,534 crore was done in 2018-19 as against 603900 crores estimated. The central GST collection in 2017-18 was Rs 2,03,261 crore.
At the same time, GDP growth has also declined to five in the second quarter of the financial year. Apart from this, there is a slowdown in the manufacturing and auto sectors too. Earlier, in 2012-13, the GDP growth was so poor with a growth of only 4.3 per cent. However, the proposed meeting of GST can be very important. The GST and Cess recovery has been very low during the last few months. This has been mentioned in the letter sent by the GST Council to the state GST commissioners of all states.
