Analysts claim the increase in the tax base could further reduce the GST rates. “This should result in GST revenue collections increasing, which, in turn, may encourage the government to rationalise the GST rates more,” Abhishek Jain, partner at EY, said.
The GST Council cut rates on 100 items in July. According to the official data, 6.6 million returns were filed in July.
The Economic Survey for 2017-18 showed 9.8 million businesses registered under the GST as of December last year. “Adjusting the base for double and triple counting, the GST has increased the number of unique indirect taxpayers by more than 50 per cent — a substantial 3.4 million,” it said.
About 1.7 million registrants fell below the GST threshold, but chose to be part of it. Those with an annual turnover of Rs 2 million can opt out. Also, more than 50 per cent of those who could have opted for the simpler composition scheme chose to register under the regular GST scheme, the survey said.
On Wednesday, the PM said small and medium businesses had some initial difficulties in the GST regime, but now they had embraced it. A committee headed by Minister of State for Finance Shiv Pratap Shukla is looking at how to simplify procedures for micro, small and medium enterprises.
Modi said the previous United Progressive Alliance (UPA) government could not implement the GST because of a lack of decision making.
Without taking the name of the International Monetary Fund (IMF), Modi referred to its observation that the elephant — a metaphor for the Indian economy — had begun to run. Referring to another IMF forecast, he said the Indian economy would drive world economic growth for the next 30 years.
“From being a part of the Fragile Five group, we have become a multi-trillion destination,” he said, referring to India touching the 100th position in the World Bank Ease of Doing Business ranking.
Among other achievements, he spoke of the government providing electricity to all villages and liquefied petroleum gas (LPG) to the poor, and enacting of laws such as the Insolvency and Bankruptcy Code (IBC) and the Benami Transactions (Prohibition) Act.
Modi said the government had provided Mudra loans to 130 million people, of whom 40 million were first-time borrowers. He referred to a report, claiming that 50 million people had been brought above the poverty line in the past two years. The PM said the government had saved Rs 900 billion by ending pilferage.
Industry leaders hailed the government’s reforms. Ficci President Rashesh Shah said the GST and the IBC were already yielding results, and reforms would yield high growth.