Lok Sabha Question No. 4213 (UNSTARRED), answered on 2023-03-27
Subject: Oxfam Report on GST Revenues
Ministry: FINANCE
Asked by: Balubhau (Alias Suresh Narayan) Dhanorkar, Kumbakudi Sudhakaran, K. Muraleedharan, Hibi Eden

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO. 4213

ANSWERED ON MONDAY, MARCH 27, 2023/CHAITRA 6, 1945 (SAKA)

## Oxfam Report on GST Revenues

4213. SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR:

SHRI KUMBAKUDI SUDHAKARAN:

SHRI K. MURALEEDHARAN:

SHRI HIBI EDEN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is aware of the Oxfam Report 2023 which states that, while India's richest  10  percentage  contribute  3  per  cent  towards  Goods  and  Services  Tax  (GST),  the country's poorest 50 percentage's contribute constitutes two thirds of GST revenues and if so, the details thereof and the reaction of the Government thereto;
- (b) whether the Government proposes to take any steps to reduce the said inequality in GST contribution and if so, the details thereof and if not, the reasons therefor; and
- (c) whether the Government is aware that small businesses are severely affected by the current GST regime because of the additional operational cost and  if  so,  the  details  thereof  and  the concrete steps taken by the Government to reduce these costs?

## ANSWER

## THE MINISTER OF STATE IN MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) & (b): The Goods and Services Tax (GST) is a consumption tax that consolidates various indirect taxes into a single tax structure, streamlining the taxation process. Being an indirect tax, GST is collected from suppliers of goods and services and not from the ultimate consumers of goods and services. Therefore, it is not possible to exactly calculate how much GST is actually paid  by  whom.  From  the  data  of  return  filing  for  the  period  April  2022  to  January  2023,  it  is evident  that  90%  of  GST  is  paid  by  top  22%  businesses  of  India  having  turnover  above  50 crores.  To  keep  the  incidence  of  taxation  low  on  items  of  mass  consumption,  goods  like unpackaged  food  grains,  fruits  and  vegetables  and  services  like  education  and  health  are exempt. In addition, items like edible oil, lifesaving medicines, and fertilizers are in 5% slab.

The Oxfam Report with respect to indirect taxes is based on estimated expenditure on certain food items and non-food items. According to the report, of the total GST collected from these food and non-food items, 64.3% is collected from the bottom 50% income group and 3-4% from the top 10% income group. Thus, the percentage is not with respect to the total GST revenue but GST from only some selected items. It is not known as to what items have been taken by the Oxfam Report. However, it seems to be based on various improbable assumptions and not irrefutable or verifiable facts.

(c): With  introduction of GST, all compliances are available online with very minimal physical interface. The compliances are uniform all across the country. Before GST, each State had its own set of compliances and procedures. GSTN provides online services for registration, return, GST payment and refund. Taxpayers are not charged anything for these services.

In GST, the exemption and the composition limits have been fixed at significantly higher levels of  Rs.  40  lakh  (for  goods  and  Rs.  20  lakh  for  services)  and  Rs.  1.5  crore  respectively  as compared to pre GST levels.

Small businesses have also benefitted by facilities such as QRMP (Quarterly Return Monthly Payment),  SMS  based  Nil  return  filing,  auto  population  of  returns,  providing  ITC  statement, automatic  transfer  of  sanctioned  refund  to  account  etc.  In  addition,  small  businesses  and MSMEs  can  avail  easy  credit/loan  facilities  using  GST  invoice  known  as  TReDS  (Trade Receivable  Discounting  Systems).  GST  regime,  in  fact,  has  improved  the  ease  of  doing business and reduced the cost of compliance.

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