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Tax rates got cheaper with GST; Businesses with annual turnover of up to Rs 40 lakh are now GST exempt: Finance Ministry
Good and Services Tax
Union Finance Ministry on the first death anniversary of former Finance Minister Arun Jaitley in a series of tweets remembered his contribution towards successful implementation of the Good and Services Tax (GST).
Union Finance Ministry on the first death anniversary of former Finance Minister Arun Jaitley in a series of tweets remembered his contribution towards successful implementation of the Good and Services Tax (GST). Jaitley held the finance portfolio in the first term of the Modi government since 2014 to General Elections 2019.
The Ministry of Finance in a tweet said, "On the first death anniversary of Shri Arun Jaitley, we pay our respects and remember his lasting contribution to nation-building and the legacy he left behind as Union Finance Minister during 2014-19." It added, "As we remember Shri Arun Jaitley today, let us acknowledge the key role he played in the implementation of GST, which will go down in history as one of the most fundamental landmark reforms in Indian taxation."
On the first death anniversary of Shri Arun Jaitley, we pay our respects and remember his lasting contribution to nation-building and the legacy he left behind as Union Finance Minister during 2014-19. (1/6)@nsitharamanoffc @Anurag_Office @PIB_India
— Ministry of Finance (@FinMinIndia) August 24, 2020
Good and Services Tax rolled out on July 17, 2017, subsumed around 17 local levies. Talking about the combination of numerous varieties of taxes like VAT, Excise, Central Sales Tax among others, the ministry tweeted, "Before GST, the combination of VAT, Excise, Central Sales Tax and the cascading effect of tax on tax resulted in the standard rate of tax being as high as 31% in many cases."
Before GST, the combination of VAT, Excise, Central Sales Tax and the cascading effect of tax on tax resulted in the standard rate of tax being as high as 31% in many cases. (3/6)
— Ministry of Finance (@FinMinIndia) August 24, 2020
The new tax system has reduced the rate at which people have to pay tax. The revenue-neutral rate as per the RNR Committee was 15.3%. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6%. The ministry said, 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.
Besides, the Finance Ministry today also said that business with an annual turnover of up to Rs 40 lakh are now GST exempt, adding that those with a turnover up to Rs 1.5 crore can opt for the Composition Scheme and pay only 1 per cent tax.
Now, Businesses with an annual turnover of up to Rs 40 lakh are GST exempt. 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 1% tax. (1/5) pic.twitter.com/Jy589R1qNV
— Ministry of Finance (@FinMinIndia) August 24, 2020
The Ministry of Finance said that since GST's implementation, the tax rate on many items has been brought down, noting that "28 per cent rate is almost solely restricted to sin and luxury items. Out of a total of about 230 items in the 28 per cent slab, about 200 items have been shifted to lower slabs.
It added significant relief has been extended to the construction sector, particularly the housing sector. It has now been placed at the 5% rate. GST on affordable housing has been reduced to 1%.
