The Fifteenth Finance Commission (FFC) chairman NK Singh has remarked that the GST system should be simplified. He is of the view that frequent tweaks in the rates will not favour the economy, according to news reports.
Singh said that the Goods and Services Tax (GST) system should be made simpler as it would become easier for businesses and traders to comply with it, said a report in Mint.
The FFC chairman said that frequent changes have resulted in a clutter that has made compliance difficult for businesses, the report said.
He was speaking on the launch of a book, "In Service of the Republic", authored by former finance secretary Vijay Kelkar and economist Ajay Shah in New Delhi on Tuesday.
The constant amendment to GST and frequent change in rates are not good for the economy, said a report in The New Indian Express quoting Singh.
The book by Kelkar and Shah put forward a point that a single GST rate of 10 percent applied to 70 percent of India’s produce would have earned the Centre and states 7 percent of the country’s GDP and would have been easier to administer, the report said.
Meanwhile, Business Standard reported that consumers would have to pay higher GST rates from 1 April next year as the GST Council is expected to take a decision on overhauling the rate structure next week in order to increase revenue collection.
Accordingly, the Centre's proposals for restructuring the GST rates include raising the 5 percent slab between 6 and 8 percent, while scrapping the 12 percent category, said the report.
On Tuesday, a Parliamentary panel on finance observed that the GST collection slowed down in recent months and asked the government to prevent misuse of input tax credit, reported PTI.
Two years after its launch, the government has begun the review of GST, including a possible resetting of rates along with the slabs, the Standing Committee on Finance headed by Jayant Sinha said in its report tabled in the Parliament.
"In this connection, the committee are constrained to observe that GST collections have somewhat slowed down in recent months as compared to the target. The committee would therefore expect the government to resolve all the troubling issues related to GST at the earliest to achieve the desired revenue buoyancy," the panel said.
GST revenue collection crossed the Rs 1 lakh crore-mark after a gap of three months in November, with the revenue growing by 6 percent to Rs 1.03 lakh crore in the month. The collection stood at Rs 95,380 crore in October.
"The committee would also urge the Department of Revenue to remain vigilant so as to prevent misuse of provisions as input tax credit and enhance monitoring of overall compliance," the committee said.
It further asked the revenue department to have systematic reports and conduct feedback surveys from taxpayers to evaluate whether GST is operating smoothly.
On Tuesday, Minister of State for Finance Anurag Singh Thakur informed Parliament that as many as 52,720 Integrated GST (IGST) refund claims are pending for more than one year, reported PTI.
The reasons for this pendency include non-submission of required documents by the applicants, he said in a written reply to Rajya Sabha.
A number of companies applied for GST refund since the introduction of the tax regime, he said, adding a total of 1,86,158 entities have filed 36,42,272 refund applications, out of which 34,46,010 refund applications have been finalised as on 2 December.
— With PTI inputs
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Updated Date: Dec 11, 2019 14:26:37 IST