22.03.2023: Top 22% firms remit 90% of GST kitty, says Union Finance Minister Nirmala Sitharaman

Ninety per cent of India’s Goods and Services Tax (GST) collections are paid by the top 22% businesses having a turnover above ₹50 crore, Finance Minister Nirmala Sitharaman said on March 21, 2023, dismissing an Oxfam report’s conclusions that the richest 10% contribute a fraction of the GST kitty, while the poorest 50% contribute two-thirds of the revenues.

The Oxfam report “seems to be based on various improbable assumptions and not irrefutable or verifiable facts”, the minister said in Rajya Sabha, noting that the GST is a consumption tax collected from suppliers of goods and services and not from the ultimate consumers of goods and services.

“Therefore, it is not possible to exactly calculate how much GST is actually paid by whom. From the data of return filing, it is evident that 90% of GST is paid by top 22% businesses of India having turnover above 50 crores,” Ms. Sitharaman added.

To keep the incidence of taxation low on items of mass consumption, goods like unpackaged food grains, fruits and vegetables and services like education and health are exempt from the GST, she pointed out. “In addition, items like edible oil, lifesaving medicines, and fertilizers are in 5% slab,” she said.

The Oxfam Report on indirect taxes is based on estimated expenditure on certain food items and non-food items and said 64.3% of the total GST collected from these food and non-food items comes from the bottom 50% income group and 3%-4% from the top 10% income group. “Thus, the percentage is not with respect to the total GST revenue but GST from only some selected items,” the minister explained, adding it is not known which items were considered by Oxfam.

In response to an MP’s question on the contribution of different income groups to GST, Minister of State for Finance Pankaj Chaudhary said it is not possible to calculate this “as neither the consumer invoice data is taken by the Government nor does the invoice have information on the income of the consumer”.

Source: The Hindu

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