GoI is incurring losses due to GST: Debroy

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The Chairman of the Prime Minister’s Economic Advisory Council (PMEAC), Bibek Debroy, said on Tuesday that the government is losing on to its revenue due to the Goods and Services Tax (GST). Bibek Debroy has advocated for a single rate instead of four different GST rates.

He also said that the decided rate should be revenue neutral, meaning, if the government does not earn any revenue, then, it should not incur a loss either. Bibek Debroy made this statement at an event of the industry group Kolkata Chamber of Commerce. Although, he also said that the GST rates have become quite easy after launch.

Debroy said, “The ideal GST is one in which there is only one rate and its purpose was to be revenue neutral. According to the calculations of the Ministry of Finance, when GST was first implemented, the average rate should have been at least 17 percent. But the current rate is 11.4 percent. The government is losing revenue due to GST.”

He said that not only the public but also the members of the GST Council want the 28 percent tax rate to be reduced. However, no one wants the zero and three percent tax rates to increase. He said in a special session on ‘Strong and Self-Reliant India’, “In this way, we will never have a simplified GST.” Debroy said that there is ‘a lot of misuse’ of GST provisions. However, he did not elaborate on this.

More than 6 years have passed since the implementation of GST in the country. Many things have been said about its success and failure from the beginning. But for the first time, someone in the government has said about GST that it is causing a loss to the government.