On disinvestment plans, Sitharaman said that the IRCTC IPO got a good response and it indicated that the market was ready for good disinvestment proposals.
Amid growing criticism of the imperfections of India’s goo-ds and services tax and the body blow it apparently dealt to small businesses and the informal sector, finance minister Nirmala Sitharaman on Friday came out in staunch defence of the destination-based consumption tax but hinted at an imminent overhaul of its structure. Since “all of us are party to (its making), let us own it up,” she said here, a day after an official release said a committee of officers would consider “a wide range of (possible) reforms” and suggest within 15 days measures to augment GST collections and improve the relevant administration.
Saying that the criticism of GST is ‘harsh’, the minister said, “It might have its flaws and it might probably give you some difficulties but we can’t just damn it.. I honestly want each one of us to give solutions for better compliance”. Sitharaman was meeting industrial representatives, chartered accountants and cost accountants and entrepreneurs here as part of an outreach programme.
On the sharp drop in August GST mop-up, the minister said: “Collections in some areas was not strong enough and it could be because of floods in Maharashtra, Karnataka, Himachal Pradesh and Uttaranchal and postponing of the date of filing of returns for some of the assessees”.
Right from its July 2017 start, the GST collections have been mostly below expectations and the tax hasn’t really yielded the economic efficiency it was supposed to. The structure was barely the simple one it was meant to be, and over the last two years, the GST rates have seen several (mostly downward) revisions and virtual addition of new slabs.
Blame a decline in nominal GDP growth and possibly an increasing inability of the system to check evasion, the gross GST collections plunged to 19-month low of Rs 91,916 crore in September.
On the panel reviewing the GST system, she said it will look into where the collections have not been adequate and cases of evasion and how to plug the evasion. “We are getting into specifics through a common broadbased committee which will then find out solutions to plug the loopholes”, she said.
Regarding the automobile sector, she acknowledged that consumer demand had not revived and said if the sector wanted anything in particular it could always talk to her.
Addressing the concerns raised by industry regarding manufacturing industry opting for imports from China and not making in India, Sitharaman said every import was not bad. Thanks to imports, she said, many Indian SMEs and downstream manufacturers were unable to get inputs at prices they could afford.
On disinvestment plans, Sitharaman said that the IRCTC IPO got a good response and it indicated that the market was ready for good disinvestment proposals. “There are a list of Cabinet-cleared disinvestments… these will be carried out as decided”, she said.