Amid concerns about the revenue impact of the Centre’s pro-middle-class ‘Next Gen GST’ with a proposed two-slab structure, government sources clarified that the Centre is an equal partner in revenue sharing with the states and that its proposal anticipates a revenue boost over time, driven by increased consumption.
Under the current Goods and Services Tax (GST) framework, revenues are shared equally between the Centre and the states. Additionally, 41 per cent of the Centre’s share of the divisible tax pool is allocated to states as per the Finance Commission’s recommendations.
“Centre has equal concerns over what is being collected and what will be collected in GST. As members of the GST Council, both are equal partners. In such a setup, is it fair to expect that the Government of India will sit as a donor to compensate states?” a government source said
Currently, Goods and Services Tax (GST) is a 4-tier structure with tax rates at 5 per cent, 12 per cent, 18 per cent, and 28 per cent. Food and essential items are either taxed at nil or a 5 per cent rate, and luxury and sin items are at 28 per cent.
The 5 per cent slab accounts for 7 per cent of total GST revenues, while the 18 per cent slab accounts for 65 per cent. The 12 and 28 per cent slabs give 5 and 11 per cent share, respectively, in the GST kitty.
Amid concerns about the revenue impact of the Centre’s pro-middle-class ‘Next Gen GST’ with a proposed two-slab structure, government sources clarified that the Centre is an equal partner in revenue sharing with the states and that its proposal anticipates a revenue boost over time, driven by increased consumption.
Under the current Goods and Services Tax (GST) framework, revenues are shared equally between the Centre and the states. Additionally, 41 per cent of the Centre’s share of the divisible tax pool is allocated to states as per the Finance Commission’s recommendations.
“Centre has equal concerns over what is being collected and what will be collected in GST. As members of the GST Council, both are equal partners. In such a setup, is it fair to expect that the Government of India will sit as a donor to compensate states?” a government source said.
Currently, Goods and Services Tax (GST) is a 4-tier structure with tax rates at 5 per cent, 12 per cent, 18 per cent, and 28 per cent. Food and essential items are either taxed at nil or a 5 per cent rate, and luxury and sin items are at 28 per cent.
The 5 per cent slab accounts for 7 per cent of total GST revenues, while the 18 per cent slab accounts for 65 per cent. The 12 and 28 per cent slabs give 5 and 11 per cent share, respectively, in the GST kitty.
