While there is a plan to review GST rates for several products at the upcoming GST Council meeting likely to take place in June, the proposed rate rationalization is reported to be delayed due to prevailing high inflation. The government planned to increase the Goods and Services Tax (GST) over the next two years and reduce the number of plates. The group of ministers set up by the GST Council to review tariffs has yet to finalize its report.
The government plans to reduce the number of GST plates from the current four to three. Currently, the GST system has four plates: 5 percent, 12 percent, 18 percent, and 28 percent. Instead of 12 percent and 18 percent plates, a new center plate of 15 percent may also be introduced. There are 480 items under 18 percent plate, of which about 70 percent come from the GST collections. In addition, there is an exempt list of items such as unbranded and unpackaged foods that are not subject to the levy.
In September last year, the GST council had set up a panel of state ministers, led by the chief minister of Karnataka, Basavaraj Bommai, to propose ways to increase revenues by rationalizing tax rates and correcting anomalies in the tax structure.
“Rationalization of rates is difficult with inflation at this level and will have to wait for the situation to improve,” an ET report citing a senior government official said.
Retail inflation April
Inflation based on the consumer price index (CPI) in India rose to an eight-year high of 7.79 percent in April 2022, compared to 4.23 percent in April 2021 and 6.97 percent in March 2022. the food basket rose to 8.38 percent in April, from 7.68 percent in the previous month and 1.96 percent in the month a year ago.
Record GST Collections in April
GST collections in April hit an all-time high of Rs 1,67,540 crore thanks to better compliance and faster economic recovery. It is Rs 25,000 crore more than the previous highest collection of Rs 1,42,095 crore which was registered in March.
“The gross GST income 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 importation of goods) and cess is Rs 10,649 crore (including Rs 857 crore collected on imports of goods),” the government said in a statement.
State-wise, Maharashtra saw the most GST collection at 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 only 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 amounts of GST, the data showed.
In terms of growth rate, Arunachal Pradesh recorded the highest 90 percent increase in GST revenue compared to April 2021. It was followed by Ladakh (53 percent growth), Andaman and Nicobar Islands (44 percent), Uttarakhand (33 percent growth). cents), Nagaland (32 percent).
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