Union Finance Minister Nirmala Sitharaman has noted that the Goods and Services Tax (GST) rate collected in India is currently below the Revenue Neutral Rate (RNR). She highlighted that while the initial target for the average GST rate was 15.3%, it has now been reduced to 12.2%. The GST Council is scheduled to meet in Delhi on the 9th, where it is anticipated that new measures may be announced to benefit sectors such as real estate, healthcare, and life insurance.
Sitharaman emphasized the need to increase tax revenue while ensuring that tax collection remains straightforward. She noted that several adjustments have been made to GST to foster a more business-friendly environment. The government aims to address issues related to tax collection and strike a balance between financial needs and public management.
In response to concerns about conflicts between the central and state governments, Sitharaman underscored the importance of understanding the GST framework and denied any significant discord. According to the RBI’s 2023 annual report, state tax revenue increased from 62.8% before GST to 65.4% after its implementation. States retain control over taxes such as fuel, deed registration fees, land registration, and excise duties on liquor. Telangana, Andhra Pradesh, and Odisha are among the states benefiting most from GST revenue.