fm-sitharaman-highlights-gst-s-role-in-cooperative-federalism

In a recent statement, Union Finance Minister Nirmala Sitharaman stressed on the pivotal role of the Goods and Services Tax (GST) in strengthening cooperative federalism and empowering states.

 

Her remarks came in light of the latest data revealing the robustness of GST collections and the significant contribution to state revenues.

 

According to the Finance Ministry's monthly report released on May 1, the gross GST collections for April surpassed the Rs 2 lakh crore mark.

 

Sitharaman emphasized that GST collections as a percentage of Gross Domestic Product (GDP) have now returned to pre-GST levels, showcasing the efficiency of tax administration and cooperative efforts between the Centre and states.

 

Addressing misconceptions surrounding GST revenue distribution, Sitharaman debunked the notion that all collections are solely retained by the Centre.

 

She clarified that states receive 100 per cent of the State GST (SGST) collected within their jurisdiction, approximately 50 per cent of the Integrated GST (IGST) on inter-state transactions, and a substantial portion of the Central GST (CGST) based on recommendations from the Finance Commission.

 

Sitharaman also highlighted the improvement in tax buoyancy brought about by GST, with the ratio increasing from 0.72 pre-GST to 1.22 during the period of 2018-2023.

 

Despite the conclusion of compensation payments to states, revenue buoyancy remains strong at 1.15.

 

The Finance Minister's remarks coincided with the administration of the oath to Justice (Retd) Sanjaya Kumar Mishra as the President of the GST Appellate Tribunal (GSTAT).