New Delhi [India], May 7 : Union Finance Minister Nirmala Sitharaman shared a post on social media on Monday and highlighted that GST (Goods and Services Tax) has reduced the taxes on many essential items.
The minister said "GST lowered taxes on many essential items compared to pre-GST rates. Common items like hair oil and soaps saw tax cuts from 28 per cent to 18 per cent "
She also highlighted the two recent achievements in the Goods and Services Tax (GST) architecture.
She emphasized the GST collection crossing of Rs 2 lakh crore and the appointment of the President of the GST Appellate Tribunal (GSTAT) as a significant milestone.
In her post, she also shared about the history of GST by crediting former PM Atal Bihari Vajpayee led the NDA government for initiating the idea and credited PM Narendra Modi for its implementation. She also highlighted the complexities of India's pre-GST indirect tax system, emphasizing the fragmented market and varied tax rates across states.
"Before GST, India's indirect tax system was fragmented & complicated, and every state was practically a distinct market in itself with different rules and tax rates. Inputs for central excise duty, etc, could not be availed, leading to an increased tax burden for the common people. - GST streamlined 17 taxes and 13 cesses into a 5-tier structure, simplifying the tax regime" said the post.
She also highlighted the positive outcomes of GST, including enhanced MSME financing, reduced logistics costs through the E-way bill system, and increased interstate trade.
Union minister also emphasized the pro-poor approach of GST, with consistently falling effective weighted average GST rates since 2017.
Furthermore, Sitharaman stressed the cooperative federalism aspect of GST, empowering states through the GST council's decision-making process. She debunked the myth that all GST collections are pocketed by the Centre, highlighting the significant contribution to state revenues.
"It is a myth that all GST collections are pocketed by the Centre. GST contributes significantly to state revenues - States receive 100% of SGST collected in that state, approx. 50 per cent of IGST (i.e. on inter-state trade). A significant portion of CGST, i.e., 42 per cent, is devolved to the states based on the Finance Commission's recommendations" said the post.
"Without GST, states' revenue from subsumed taxes from FY 18-19 to 2023-24 would have been Rs. 37.5 lakh crore. With GST, states' actual revenue amounted to Rs. 46.56 lakh crore" it further added.
The Minister said "Despite the GST rate being less than the prescribed Revenue Neutral Rate and COVID-19 affecting the revenues, GST collections (as a % of GDP) have now reached the levels they were before GST (both net and gross). This demonstrates that the Centre & States, collectively, through better tax administration, are able to collect the same revenue with a lower burden on our taxpayers".
At the end, the post concluded by adding "GST is an expression of Modi Govt's commitment to'Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayaas'. Our continuous efforts are towards ensuring that new heights are scaled through better taxpayer services and increased efficiencies instead of increased taxes".
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