The much-anticipated increase in Goods and Services Tax (GST) is not happening any time soon, said Bihar Deputy Chief Minister Sushil Kumar Modi at a recent FICCI event. Modi, who is also the Convenor of Group of Ministers on Integrated Goods and Service Tax (IGST), said there is no possibility of a GST rate hike before indirect tax revenue generation stabilisies. His statement comes days after the GST Council refrained from hiking tax rates and alternating tax slabs.Modi added that the GST Council considered changing rates once every year at the last meeting. Speaking at FICCI’s 92nd annual convention ‘India: Roadmap to a $5 Trillion Economy’, Modi assured that neither states nor Centre is ready to raise tax rates as the economy is currently going through a period of slowdown. He added that there is very little scope to hike GST rates as it could further derail consumption. “Till GST revenue doesn’t stabilise, we can’t think of decreasing the rates. In fact, there is no possibility of change in slabs and tax rates in the near future,”Modi said.
The Bihar deputy chief minister went on to say that it is not the right time for any change to the slabs as well. While there is a plan to make GST a three-slab system, it will take time for the recalibration as a sudden transition could lead to issues. However, a sharp fall in GST revenue has the Centre worried about meeting its target despite a recovery in November collections. According to reports, the Centre is currently staring at a compensation cess shortfall of Rs 63,200 crore, which could rise up to Rs two lakh crore by 2021-22.
A few days ago, Prime Minister’s Economic Advisory Council (PM-EAC) Chairman Bibek Debroy also said that the Centre neither has the leeway to cut taxes nor it has space to hike GST rates due to the present economic outlook.The government, however, is trying to maximise GST collection in the remaining months of 2019-20. Sources told India Today TV that the secretary conveyed to officers of the two boards that the GST revenue collection target for the next four months is Rs 1.10 lakh crore for all four remaining months.In fact, in one of the four months, an ambitious revenue collection target of Rs 1.25 lakh crore has been set by the revenue secretary
Source: India Today