Published 15:39 IST, December 11th 2019
GST rates may go up for various items to meet revenue shortfall
With pressure on revenue collection, the goods and services tax (GST) rates and slabs may be raised during the GST Council meeting next week.
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With pressure on revenue collection, goods and services tax (GST) rates and slabs may be raised during GST Council meeting next week. all-powerful GST Council, headed by Finance Minister Nirmala Sitharaman, is set to meet on December 18 in backdrop of lower-than-expected GST collection and pending compensation to many states.
As of w, re are four slabs under GST regime -- 5, 12, 18 and 28 per cent. Goods and services under 28 per cent category also attract cess over and above rate, which ranges between 1 and 25 per cent.
A group of officers from Centre and states, which met on Tuesday to finalise recommendations for rate rationalisation, is said to have considered various options including raising rates from 5 per cent to 8 per cent and 12 per cent to 15 per cent, sources said.
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A detailed presentation on rate rationalisation will take place during GST Council meeting. GST Council meeting is also likely to deliberate on raising cess on some products to meet growing need of compensation, among or issues.
Council can explore possibility of merger of slabs to bring down number of slabs to three, sources said. It is likely to revisit exemption list and explore wher cess can be levied on some services, sources added.
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Central GST collection fell short of Budget Estimate by nearly 40 per cent during April-vember period of 2019-20, according to government data. actual CGST collection during April-vember stood at Rs 3,28,365 crore, while Budget Estimate is of Rs 5,26,000 crore for se months.
In 2018-19, actual CGST collection stood at Rs 4,57,534 crore as against provisional estimate of Rs 6,03,900 crore for year, he said. In 2017-18, CGST collection was Rs 2,03,261 crore. Meanwhile, India's GDP growth slumped to a 26-quarter low of 4.5 per cent in second quarter of current financial year as gross value added to manufacturing sector contracted for first time in nine quarters.
last time GDP grew at a slower pace was in fourth quarter of 2012-13, when it had expanded only 4.3 per cent. compensation requirements have increased significantly and are unlikely to be met from compensation cess being collected.
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This discussion is quite critical as lower GST and compensation cess collections have been a matter of concern in past few months, according to a letter written by GST Council to commissioner, SGST, of all states.
Council has sought suggestions, inputs or proposals as regards measures, on compliance as well as rates that would help in augmenting revenue.
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15:28 IST, December 11th 2019