The Finance Ministry on Monday recounted several achievements of former Finance Minister Arun Jaitley who heralded the Goods and Services Tax (GST) and passed away a year ago. GST, which subsumed about 17 local levies, was rolled out on July 1, 2017. Jaitley held the finance portfolio in the first term of the Modi government since 2014.
In a series of tweets, on the first death anniversary of former Finance Minister Arun Jaitley, the ministry said before goods and services tax (GST), the combination of value-added tax (VAT), excise, sales tax and their cascading effect resulted in a high standard rate of tax of up to 31 per cent. The Ministry tweeted, "Once GST was implemented, the tax rate on a large number of items was brought down. As of now, the 28 per cent rate is almost solely restricted to sin and luxury items. Out of a total of about 230 items in this slab, about 200 have been shifted to lower slabs."
Cinema tickets, which were taxed in the range of 35 per cent to 110 per cent earlier, are now taxed at 12-18 per cent under the GST regime, the ministry tweeted.
Common-use items such as hair oil, toothpaste and soap have seen their tax rates come down from 29.3 per cent in the pre-GST era to just 18 per cent under the GST, it added. The revenue-neutral rate as per the RNR Committee was 15.3 per cent. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6 per cent.
The Ministry added that significant relief has been extended to the construction sector, particularly housing, which has now been placed at the 5 per cent rate. Meanwhile, GST on affordable housing has been reduced to 1 per cent.
The number of assessees covered by the GST at the time of its inception was about 6.5 million."Now the assessee base exceeds 1.24 crore (12.4 million). All processes in GST have been fully automated," said the ministry. The government has now automated GST filing with over 500 million returns filed so far. " It is now widely acknowledged that GST is both consumer and taxpayer-friendly. While the high tax rates of the pre-GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance, the ministry said.
Initially, this limit was Rs 20 lakh. Additionally, those with a turnover up to Rs 1.5 crore can opt for the composition scheme and pay only one per cent tax, said the ministry.