Finance Minister Nirmala Sitharaman said that the Central Government has adopted “a pro-poor approach” while implementing the GST, and despite lower taxes rates the revenues as a percentage of GDP have reached the pre-GST level.
“Despite the GST rate being less than the prescribed Revenue Neutral Rate and COVID-19 affecting the revenues, GST collections (as a percentage 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,” she said.
“Reflecting a pro-poor approach, the effective weighted average GST rate has consistently fallen since 2017. The Revenue Neutral Rate was suggested to be 15.3 per cent but was lower at 14.4 per cent in 2017, and it has come down to 11.6 per cent in 2019,” the finance minister highlighted.
The GST turnover threshold for registration rose to ₹ 40 lakh for goods and ₹ 20 lakh for services (from ₹ 5 lakh on average under VAT). the finance minister commented that without GST, states’ revenue from subsumed taxes from FY 2018-19 to 2023-24 would have been ₹ 37.5 lakh crore. With GST, states’ actual revenue amounted to ₹ 46.56 lakh crore.
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