GST Collection Rises 12% to over Rs 1.61 Lakh Crore in June

What’s in today’s article?

• Why in News?
• About Goods and Services Tax
• GST Rate Slabs
• About GST Council
• Role of GST Council
• Composition of GST Council
• Decision-making of GST Council
• News Summary

 

Why in News?

• The Finance Ministry said that the GST collections rose 12 per cent to over Rs 1.61 lakh crore in June, 2023.

 

About Goods and Services Tax

• Goods and Services Tax is a single indirect tax which has replaced multiple indirect taxes in India such as the excise duty, VAT, services tax, etc.
• GST is levied on the supply of goods and services in India. It came into effect from July 2017.
• Objective: To remove the ambiguity and bring equality in the prices of products across the country.
• It eventually aspires to reduce the manufacturing cost of businesses and create a unified and streamlined market where the cost of goods and services will be more even across the country.

 

GST Rate Slabs

 

Image Caption: GST Rate Slabs

• The rates are notified on the recommendation of the GST Council.
• GST rates have been structured in a way that essential services and food items are placed in the lower tax brackets, while luxury services and products have been placed in the higher tax bracket.
• The GST council has fitted over 1300 goods and 500 services under four tax slabs of 5%, 12%, 18% and 28% under GST.
  • This is aside the rate on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST.
• 7% of goods and services fall under exempted GST Rate Slab i.e., 0% tax.
• Some of these that are of regular consumption include fresh fruits and vegetables, milk, butter milk, curd, natural honey, flour, etc.

 

About GST Council

• Goods and Services Tax (GST) Council is a Constitutional body formed under Article 279A of the Constitution.
• It was introduced by the 101^st Constitutional Amendment Act, 2016.
  • Objective: To regulate and direct each and every step for the implementation of goods and service tax in the nation.

 

Role of GST Council

• The GST Council makes recommendations to the centre and the states on the following matters:
  • Taxes, cess, and surcharge levied by the centre, states and local bodies which might be incorporated under GST.
  • The goods and services that are subjected to or exempted from GST.
  • The model of GST laws and allocation of Integrated Goods & Services Tax (IGST) and the principles governing the place of supply.
  • Special rates for a specific period to raise additional resources during a natural calamity.
  • The date on which GST is to be levied on high-speed diesel, petroleum crude, natural gas, and aviation turbine fuel.
  • The maximum limit of turnover below which goods and services might be exempted from GST.
  • The rates including GST bands of floor rates.
  • Any other GST related concern as deemed by the Council.

 

Composition of GST Council

• The GST Council consists of the following members:
  • Union Finance Minister (Chairperson)
  • Union Minister of State in-charge of Revenue and Finance
  • Ministers in-charge of Finance or Taxation of all the States

 

Decision-making of GST Council

• GST Council is required to meet at least once in three months.
• Every decision of the GST Council has to be taken by a majority of not less than three-fourths of the weighted votes of the members present.
  • The vote of the central government has a weightage of one-third of the total votes cast, and
  • The votes of all the state governments taken together have a weightage of two-thirds of the total votes cast in that meeting.

 

News Summary

 

Image Caption: GST Collections

• The Finance Ministry said that the GST collections rose 12 per cent to over Rs 1.61 lakh crore in June, 2023.
• The gross GST collection has crossed Rs 1.60 lakh crore mark for the fourth time since the roll-out of the indirect tax regime six years ago on July 1, 2017.
• The revenues for June 2023 are 12 per cent higher than the GST revenues in the same month last year.
• The revenues had touched a record high of Rs 1.87 lakh crore in April, 2023.

 

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Q1) What is Tax Buoyancy?

Tax buoyancy explains the relationship between the changes in government's tax revenue growth and the changes in GDP.

 

Q2) What is the basic difference between tax evasion and tax avoidance?

Tax evasion means concealing income or information from tax authorities — and it's illegal. Tax avoidance means legally reducing your taxable income.

 

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Source: GST mop-up rises 12% to over Rs 1.61 lakh crore in June  | ToI