GST Collections Signal Strong Economic Growth for Finance Minister

Even after raising several doubts, GST created a benchmark for itself. When this new tax regime was implemented everyone was worried about what would happen next, but the current statistics revealed by the finance minister of India clear that we are on a progressive track and slowly and steadily we will reach our destination.

Arjun Ram Meghwal, Union Minister went on saying that GST is like a new daughter in law that takes time to adjust according to new family norms.  He even went on saying that the country’s economic growth as well as real estate sector will earn dividends from this landmark legislation.

Now, here comes the report card of GST

In a press conference, finance minister revealed that in July, 92,283 has been received as GST receipts from 3.9 million tax payers, as compared to the target of 91,000 crore.

“At least the red line seems to have been crossed. Technically, with 64.42% of tax payers’ compliance, we have exceeded target,” Jaitley told reporters.

What does this figure imply?

This figure has put all the speculations to rest, at least for a while, that the transformation could lead to the revenue losses. It has strengthened the barnstormers of the GST. However, there are wide variations across different states like GST has increased the tax base by 8.47% in Punjab and 39.70% in Telangana.  However, as the picture of GST differs from state to states, the individual states like Andhra Pradesh, Gujarat, Goa, Jharkhand, Chattisgarh, Himachal Pradesh, Punjab, Chattisgarh, Madhya Pradesh, Tamil Nadu and Odisha would require compensation from the central government for any revenue loss incurred. This, in turn, would burden exchequer an amount of Rs 56 billion. These figures are based on the assumption that the final production of GST accounts for 10 percent.

So, does that mean the government is at a loss?

Well, this game changer move would prove to be a trump card for the Indian economy. On one hand, it will reduce the overall tax burden on the consumer and on the other hand it will reduce the tax complications for the businessman. It is believed that GST will usher stable tax system. And ultimately, will able to increase the tax collections by removing leakages.