Amid reports of GST rate hike, former chief statistician tells why it may not help much

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December 11, 2019 11:26 AM

Increasing the GST structure is expected to raise an additional Rs 1 lakh crore in revenue.

GST evasion, GST, ecommerce portals, Amazon, Flipkart, TCS data, Amit Mitra, Form GSTR-9, GSTR-9C, ITCThe actual CGST collection during April-November stood at Rs 3,28,365 crore.

Amid reports of the GST Council mulling rate hike, Pronab Sen, Former Chief Statistician of India said that the possible move may not help much in increasing demand or fight consumption-led slowdown, CNBC TV18 reported. It comes after a media report said that the GST Council is expected to rejig the tax slabs and hike the current 5 per cent rate to 6 per cent to boost collection. Essential commodities including food items, basic clothing, and footwear are covered under the 5 per cent slab. Increasing the GST structure is expected to raise an additional Rs 1 lakh crore in revenue, the report added.

An increase in GST rates may result in disruption, Pronab Sen said. The problem is not with the existing rates but efficiency, he also said, adding that a rate increase would not be able to resolve the administrative issues with the GST that needs to be sorted. The 6 per cent GST rate would be applied to basic necessities at a time when consumer demand has slowed. Taking stock of the matter, Kerala finance minister Thomas Isaac on Tuesday said that Kerala will move the Supreme Court if the central government refuses to honour compensation, CNBC TV18 reported him as saying.

Also read: One nation, one ration card: Single platform for 12 states by January to buy subsidised food grain

Thomas Isaac also said that hiking slabs now is not the right decision as in the current situation it’s not right to impose a higher burden on people. It’s better to raise the higher slab, he added. Meanwhile, the Central GST collection fell short of the budgeted estimate by nearly 40 per cent during the April-November period of 2019-20. The actual CGST collection during April-November stood at Rs 3,28,365 crore while the budgeted estimate is of Rs 5,26,000 crore for these months, Minister of State for Finance Anurag Singh Thakur said in a written reply in Lok Sabha.

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