Restructuring of tax slabs isn’t part of the GST Council agenda on Wednesday but it could still be discussed being part of the recommendations by a panel of tax officials, sources say.
Restructuring of tax slabs isn’t part of the GST Council agenda on Wednesday but it could still be discussed being part of the recommendations by a panel of tax officials, sources say. However, they added that since multiple states have opposed these proposals as a way to boost revenue, a final call may not be made at Wednesday’s meeting.
The 38th GST Council meeting would discuss the reasons for the decline in revenue collection and also consider measures to augment mop-up for the remaining four months of the year. The panel of officials would apprise the Council of the reasons for tepid revenue growth which includes tax rate changes below revenue neutral rate and hike in GST threshold limit, among others.
According to tax department’s estimates, the government needs to collect nearly Rs. 1.14 lakh crore per month for the remaining four months to meet its estimates for gross collections. In the April-November period, average monthly GST collection is a little over Rs. 1 lakh crore. This suggests that the government could be staring at a revenue shortfall of around Rs. 50,000 crore in the year. “Most states aren’t agreeable to rate hike in lower or higher tax bracket. That is unlikely to be approved but such proposals could be discussed on its merits,” Sushil Modi, deputy chief minister of Bihar, said.
The panel in their suggestion for revenue augmentation have proposed hike in cess on some items even in the 18% slab as a short-term measure.