Rising GST collections to help cut tax rates, says FM Piyush Goyal

A couple of days after goods and services tax (GST) rates were cut on 100 items, Union Finance Minister Piyush Goyal said rising tax collections will further help reduce the tariffs.

 

Meanwhile, he said, the Directorate General of Anti-Profiteering has been directed to keep a tab on manufacturers of sanitary napkins, so that benefits of the GST rate cut are passed on to consumers. The GST Council had exempted sanitary napkins from GST, on Saturday.

 

The Council had also cut rates on almost 100 items. Of these, 18-20 items saw the rate coming down from the highest slab of 28 per cent, leaving just 35 items, including ACs, digital cameras, video recorders, dishwashing machines and automobiles, in the highest tax bracket.

 

GST collections have been on the rise since the end of 2017-18. It touched slightly over Rs 1 trillion in April, but that was an aberration. After that, collections came down to Rs 940.16 billion in May and Rs 956.1 billion in August, which were still higher than the average monthly collections of Rs 898.85 billion in 2017-18.

 

However, the government’s target of Rs 1 trillion a month for the current financial year, is still not a norm. The next council meeting on August 4 is likely to take up issues of medium and small scale enterprises, and incentivisation for digital transactions.

 

Goyal said he has asked the Directorate General of Anti-Profiteering to examine if manufacturers had cut prices earlier when GST was introduced on July 1, 2017, or are reducing prices now.

 

There have been reports that sanitary napkins will not benefit from the exemption from GST since they will not be able to claim credit on raw materials used in manufacturing.

 

Terming these reports as “misplaced calculation”, Goyal said, “I have already instructed the department, which looks after anti-profiteering, to investigate and ensure that either the rates should have had come down on July 1, 2017, or should come down now. It cannot be that they have the cake and eat it too.”

 

In a tweet, the finance minister said, “A massive step taken to resolve NPAs. 24 public, private & foreign banks have signed inter-creditor agreements under Sashakt to resolve stressed assets. This resolution over dissolution approach will strengthen banks and businesses, protect jobs and help economy grown even faster.”