BUSINESS

GST Boosted Consumption and Reduced Monthly Bills for Households, According to the Government

Since its adoption six years ago, the Goods and Services Tax (GST) has functioned as a catalyst for boosting domestic consumption and assisted consumers in reducing monthly expenses, the government said on Friday.

The government compared the tax rates on different items before and after the implementation of the GST and said that from simplifying procedures to encouraging investment, the GST has been a catalyst for advancement.


The office of Finance Minister Nirmala Sitharaman tweeted, “The implementation of GST has made it easier for taxpayers to comply with tax law and this can be seen in the fact that the number of registered taxpayers has increased from 1.03 crore that enrolled into GST by April 1, 2018 to 1.36 crore by April 1, 2023.”

On July 1, 2017, at the stroke of midnight, a national GST went into effect, replacing 13 cessers and 17 local taxes, including VAT, service tax, and excise duty.

GST imposes a four-rate system, with the lowest rate being 5% on necessities and the highest rate being 28% on luxury and inferior products. The two additional tax slabs are 12 and 18 percent.

In addition, a special rate of 3% is applied to gold, jewellery, and precious stones, while a rate of 1.5% is applied to cut and polished diamonds. In addition, the highest tax bracket of 28% on luxury, sin, and depreciable products is charged with a cess.

The office of Nirmala Sitharaman tweeted, “GST, which was introduced six years ago and incorporated 17 taxes and 13 cesses levied by the central and state governments, has not only helped in reducing tax burden on the citizens but has also proven to be the engine for driving consumption in the country.”

Prior to the introduction of the GST, a customer would have paid an average of 31% in taxes as a result of the combination of VAT, excise, and CST.

The Finance Ministry tweeted, “With reduced taxes, #GST brings happiness to every home: Relief through #GST on various consumer goods of daily use.”

GST has proven to be a game-changer in India’s indirect tax structure and has given all stakeholders access to a variety of advantages. According to the government, advantages include lower costs for a range of products and services, a level playing field for all taxpayers, and more income due to better compliance.

When the GST was introduced in 2017, the monthly GST receipts were between Rs 85,000 and 95,000 crore, but they have now surged to almost Rs 1.5 lakh crore and are continuing to rise. In April 2023, it reached an all-time high of Rs. 1.87 lakh crore.

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