12 DEC 2019 By Hardeep Singh
GST New Rate: GST rates may increase
In recent times there has been a demand for compensation from the states and the government is under pressure due to the continuous decline in the collection of Gst. The GST Council has sought suggestions and information from all partners to increase the revenue.
GST rates may increase
With the pressure on revenue collection, the increase in GST rates and slabs can be approved in the GST Council meeting to be held next week. The GST Council headed by Finance Minister Nirmala Sitharaman will meet on 18 December. There is a lot of pressure on the Center due to lower than expected GST collection and delay in compensation to most states.
If sources are to be believed, in this GST Council meeting to be held on December 18, the government may take a big decision to increase the GST rates.
Status of current rates of GST
Presently four slabs are 5, 12, 18 and 28% under GST. A cess (tax) of 1% to 25% is also levied in 28% slab. A group of officials from the central and state governments on Tuesday finalized their recommendations to rationalize GST.
Potential increase in GST rates as follows
Officials said they have considered various options including increasing the rate of 5% to 8% and increasing the rate of 12% to 15%.
A presentation on the rates will be given in the GST Council meeting. To meet the demands related to compensation and other issues, the council may decide to increase the cess (tax) on certain products. According to sources, the council may also consider the possibility of merger of the slab to reduce the number of slabs.
GST Financial Loss Session 2019 -2020
According to sources, the exempted list can be reviewed in the meeting and some services can be taxed. The GST collection in April - November 2019-20 has been 40% lower than the budget estimate.
The actual GST collection during April - November 2019-2020 has been Rs 3,28,365 crore, but the budget estimate was Rs 5,26,000 crore. The actual GST collection stood at Rs 4,57,534 crore in 2018-19, but the full year estimate was Rs 6,03,900 crore. The GST collection in 2017-18 was Rs 2,03,261 crore.
India's GDP growth in the second quarter of the fiscal year 2019-2020 is at the lowest level of 4.5% in 26 quarters. In the fourth quarter of 2012-13, GDP growth was recorded at 4.3%.
From the analysis of the above figures, it has been proved that the current government is under great pressure. Due to which the government can increase the rates of GST.
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