Over 40% business entities make zero GST payment

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Over 40% business entities make zero GST paymentInitially, the people were talking about heavy burden of GST over the small businesses. But figures are telling something else. Initial data describing that 40% of the 54 lakh companies claimed nil tax liability and paid no tax in the July month. There are 22 lakh companies which did not pay even one rupee GST. Remaining 60% or 32 lakh businesses which filed returns on the GST Network (GSTN), many did not have a cash liability as they opted to use the credits available for service tax or excise that they had paid before GST kicked in on July 1. As per the government data, there are about 70% of the 32 lakh companies which are liable for the tax and had paid tax between Rs 1 and Rs 33,000. There are about 0.3% or 10,000 companies that accounted for two-thirds of the GST mopped up by the government in July. The government had mopped up around 94,000 crores during July.

Also Read: Businesses under composition scheme to soon start filing GST returns

On Friday, finance minister Arun Jaitley said that there is total about 1 crore businesses and service providers are registered with GSTN including 72 lakh migrant from excise, VAT and service tax and about 25-26 lakh new taxpayers. He also said that there is 94-95% of the tax collected from large assessees whose turnover is more than Rs 1.5 crore, who make up around 10% of the registered base of taxpayers. Many political parties criticise GST implementation. The government is trying to fill the gap between taxpayers and system and has said that the reason behind the criticism is the entities which were out of net earlier and now being forced to pay up.

Although tax collections are lower from a majority of the taxpayers, the government is hoping that GST will help widen the base and create space in the future to reduce the tax rate. Jaitley said at Friday’s meeting that GST Council also decided on how rates will be tweaked in the future. “ As revenue increases, and depending on the revenue neutrality situation in the future, rates will be tailored according to the concept paper (that was cleared),“ he said.

Original post on – http://economictimes.indiatimes.com

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