Even as there is a plan to revise GST rates on various products in the upcoming GST Council meet that is likely to take place in June, the proposed rate rationalisation may be delayed due to the prevailing high inflation, according to reports. The government was planning to raise the goods and services tax (GST) in the next two years and reduce the number of slabs. The group of ministers set up by the GST Council to review rates is yet to finalise its report.
The government plans to reduce the number of GST slabs from the current four to three. Currently, the GST system has four slabs — 5 per cent, 12 per cent, 18 per cent, and 28 per cent. A new median slab of 15 per cent may also be introduced in place of 12 per cent and 18 per cent slabs. There are 480 items under the 18 per cent slab, from which about 70 per cent of the GST collections come. Apart from this, there is an exempt list of items like unbranded and unpacked food items that do not attract the levy.
In September last year, the GST Council had set up a panel of state ministers, headed by Karnataka Chief Minister Basavaraj Bommai, to suggest ways to augment revenue by rationalising tax rates and correcting anomalies in the tax structure.
“Rate rationalisation is difficult with inflation at this level and has to wait till the situation improves,” according to an ET report quoting a senior government official.
April Retail Inflation
The Consumer Price Index (CPI)-based inflation in India soared to an eight-year high of 7.79 per cent in April 2022, compared with 4.23 per cent in April 2021 and 6.97 per cent in March 2022. Inflation in the food basket rose to 8.38 per cent in April, from 7.68 per cent in the preceding month and 1.96 per cent in the year-ago month.
Record GST Collections in April
The GST collections in April hit a record high of Rs 1,67,540 crore on the back of better compliance and faster economic recovery. It is Rs 25,000 crore more than the previous highest collection of Rs 1,42,095 crore recorded in March.
“The gross GST revenue collected in the month of April, 2022 is Rs 1,67,540 crore of which CGST is Rs 33,159 crore, SGST is Rs 41,793 crore, IGST is Rs 81,939 crore (including Rs 36,705 crore collected on import of goods) and cess is Rs 10,649 crore (including Rs 857 crore collected on import of goods),” the government has said in a statement.
State-wise, in terms of absolute GST collection amount, Maharashtra saw the most GST collection of Rs 27,495 crore, followed by Karnataka (Rs 11,820 crore), Gujarat (Rs 11,264 crore), Uttar Pradesh (Rs 8,534 crore) and Haryana (Rs 8,197 crore), according to the latest official data.
Among the lowest GST-collecting states were Mizoram with just Rs 46 crore, Nagaland (Rs 68 crore), Manipur (Rs 69 crore), Tripura (Rs 107 crore), and Arunachal Pradesh (Rs 196 crore). Few UTs collected even less or negligible GST amount, the data showed.
In terms of growth percentage, Arunachal Pradesh posted the highest 90 per cent jump in GST revenue as compared to April 2021. It was followed by Ladakh (53 per cent growth), Andaman and Nicobar Islands (44 per cent), Uttarakhand (33 per cent), Nagaland (32 per cent).
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