New Delhi– Around 4 lakh people contribute 95 per cent of GST collections, while 35 per cent of those who have filed returns mostly paid no tax, Finance Minister Arun Jaitley said on Thursday.
He provided these figures emerging from studies in response to a query at industry chamber Ficci’s 90th AGM here on whether the Goods and Services Tax (GST) is proving a burden for small businesses.
“According to studies done on GST collections, of all those who have registered in the new regime, 95 per cent of the taxes comes from 400,000 people, who are paying irrespective of the procedure involved,” he said.
“For 35 per cent of the returns, the tax paid is either mostly nil, or negligible,” he said.
Admitting that the return compliance burden was a legitimate issue being examined by the GST Council, Jaitley said this “federal institution” had successfully managed to rationalise the rates for many items “in a span of 3-4 months”.
“It is important that we continue the structural changes towards greater formalisation of the economy and more rationalising of GST looking at global tax rates,” he said addressing the Ficci’s AGM.
“It is only when formalisation expands that one can rationalise rates, which is not possible in a non-compliant society and applies to both direct and indirect taxes,” he added.
Among the urgent issues requiring atention over the coming year, the Finance Minister listed the accumulated non-performing assets (NPAs), or bad loans, in the Indian banking system as a major one.
“Fixing banks and completing the unfinished task of strengthening PSBs (public sector banks) will be a priority for the next year,” Jaitley said.
He said that although the banks have deposits, their lending capacity of banks is constrained due to capital inadequacy, which had prompted the government to come out with a recapitalisation plan for PSBs.
In October, the government announced a massive recapitalisation plan worth Rs 2.11 lakh crore for state-run banks.
Jaitley also emphasised the need to continue the momentum on infrastructure creation and expedite investment in the railway sector.
On disinvestment in state-run enterpises, he said that for first time ever, the government is confident of exceeding its target in fiscal 2017-18.
“On the Air India divestment we are moving quite expeditiously. Advisors have been appointed and we will soon come out with the next step,” he added. (IANS)