FM: 90% GST paid by top 22% companies | The Financial Express

FM: 90% GST paid by top 22% companies

The report by Oxfam India titled ‘Survival of the Richest: The India Supplement 2023’, which was released in January this year highlighted the widening gap between the rich and poor post the Covid-19 pandemic and amongst its many suggestions called for easing the tax burden on the poor and the marginalised by reduction of GST slabs on essential commodities.

Nirmala Sitharaman
Finance Minister Nirmala Sitharaman (File)

As much as 90% of the goods and services tax is paid by the top 22% businesses of the country, which have turnover of over Rs 50 crore, finance minister Nirmala Sitharaman informed the Rajya Sabha on Tuesday, citing the data on return filing.

Dismissing the recent report by Oxfam that the country’s richest 10% contributes 3% towards GST, whereas the country’s poorest 50% contributes two-thirds of GST revenues, the minister said it “seems to be based on various improbable assumptions and not irrefutable or verifiable facts”.

Responding to a starred question in Rajya Sabha on inequality in GST contribution, Sitharaman said, “The Oxfam report with respect to indirect taxes is based on estimated expenditure on certain food items and non-food items. According to the report, of the total GST collected from these food and non-food items, 64.3% is collected from the bottom 50% income group and 3-4% from the top 10% income group. Thus, the percentage is not with respect to the total GST revenue but GST from only some selected items,” she said, adding that it is not known as to what items have been taken by the Oxfam report.

The report by Oxfam India titled ‘Survival of the Richest: The India Supplement 2023’, which was released in January this year highlighted the widening gap between the rich and poor post the Covid-19 pandemic and amongst its many suggestions called for easing the tax burden on the poor and the marginalised by reduction of GST slabs on essential commodities.

The finance minister however, said that to keep the incidence of taxation low on items of mass consumption, goods like unpackaged food grains, fruits and vegetables and services like education and health are exempt from GST and items like edible oil, lifesaving medicines, and fertilisers are in the 5% slab.

Being an indirect tax, GST is collected from suppliers of goods and services and not from the ultimate consumers of goods and services, she said, adding that it is not possible to exactly calculate how much GST is actually paid by whom.

Meanwhile, responding to another question, minister of state for finance Pankaj Chaudhary said it is not possible to calculate the GST raised from different income groups as neither the consumer invoice data is taken by the government nor does the invoice have information on the income of the consumer.

“The government has already levied taxes in such a way that the burden of taxes is lower on lower income groups,” he said, noting that most of the goods and services consumed by such groups are either tax exempt or attract lower GST rates.

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First published on: 22-03-2023 at 20:20 IST
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