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New Delhi: The GST Council at its next meeting is unlikely to bring down more items from the top tax slab of 28 per cent despite the demand from sectors such as cement, paints, and white goods.

The pruning of the top slab is unlikely given the fall in revenue collection, a senior North Block official said.

 

Total collections in November added up to Rs 80,808 crore, down from a provisional Rs 83,346 crore in October and a peak of over Rs 94,000 crore in July, data released by the government showed.

 

The GST Council will meet here on January 18.

 

While only 50 items remain in the 28-per-cent slab, the industry has been pushing for bringing down the rates for items such as cement, paints, and white goods.

 

Sources said a rate cut at this juncture was unlikely as items such as cement constitute a major chunk of revenue.

 

"Though the reasons can be attributed to the lowering of rates in mid-November, the expansion of tax base and buoyancy due to rate reduction should have ideally checked the dip in collections ... If this continues, the government may hesitate to further rationalise GST rates," Abhishek Jain, tax partner, EY, said.

 

"The dip in collection in revenue for November is on expected lines, as rates of over 175 items were reduced from November 15 and refunds to exporters started recently. Even for December, there could be an impact of opening credit claim for which the last date was December 27. From January, the collections should stabilise," Pratik Jain, leader, indirect tax, PwC, said.

 

Falling collections could delay further rationalisation of taxes under the new regime apart from impacting the government's fiscal calculations.

 

The GST Council had in November moved 178 goods, including items of daily use such as washing powder and toothpaste, from the highest 28 per cent bracket to the 18 per cent and 12 per cent slabs to lower the prices for consumers.

 

According to some estimates, the government will face a revenue loss of Rs 20,000 crore annually owing to the rate cut.

 

There are indications that the issue of including natural gas could be taken up in the next meeting of the council.

 

Sources said the entry of natural gas "would help the industry in getting input credit and in increasing the use of clean fuel in the country".

 

At present, gas sales including CNG and piped gas supplies attract lower VAT, ranging from 5 per cent to 12 per cent.

 

Source : Telegraph India

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