FM Amit Mitra: Borrowing for GST Aid Not a Workable Solution

On Wednesday, July 1st, Amit Mitra, Finance Minister of West Bengal stated that the idea of borrowing from the market to give compensation amount to states for their loss was not a workable solution.

In June 2020, GST Council had a meeting in which it had been decided that they will organize a one-agenda meeting in July month to discuss the option of borrowing from the market to eliminate the gap between state revenue and actual GST Collection. The Economic Slowdown in Financial Year 2020-2021 will make the gap wider between the compensation cess funds and the states protected revenue.

Amit Mitra said that states protected annual revenue growth of 14% — on the base of FY16 revenue collection from all items subsequently subsumed under GST-was based on a reasonable growth rate which “this government at the centre has failed to produce”. He further added that the economic growth had fallen continuously over the quarters even before COVID-19.

In his statement, he openly blamed the structure of the GST for the lower revenue growth, he also said that the Infrastructure of Income tax Easy guide to file an income tax return for the FY (financial year) 2019-20. Also, we added the document checklist related to Personal, Income, tax, bank, real estate, investment, etc. Read more too failed to be friendly and to stop the frauds and evasion.

Amit Mitra said that “The questionable readiness of the IT system at the time of GST launch was further exacerbated by multiple interventions changes in the number of forms, law, and circulars Get to know the latest GST circulars and orders in PDF format as published by CBIC. Here, the taxpayers can read CGST, IGST, and UTGST circulars/orders. Read more“.

Mitra further stated “On March 14, Nandan Nilekani came to the GST Council and made the presentation — as Infosys works with the government on creating and maintaining the IT system — he said the model allows several kinds of frauds”.

Mitra while referring to Nilekani’s estimates, added in his statement that “fraud related to under-declaration resulted in the loss of Rs 31,247 crore between the fourth quarter of 2018 and the third quarter of 2019, which involved over 97,000 companies. Further, additional revenue of Rs 38,771 crore was lost during the same year due to excess input tax credit claims which couldn’t be prevented in the absence of an invoice-matching system With the increasing fear of declining GST collection, the government can change the procedure of the Invoice Matching system. In consideration of this move. Read more“.

On the idea of GST’s five slabs, the Finance Minister of West Bengal said that in a developing country like India exempt and 5% tax rate slabs would have to be there. Further, he said that the 28% slab could be pruned to only a few items followed by an eventual merger of 12% and 18% slabs.