Even as goods and services tax (GST) may have completed two years since introduction, it’s still an unfinished agenda, said 15th Finance Commission Chairperson NK Singh said at the National Taxation Awards on Monday. There is a need to bring about fundamental changes in the GST framework and complete the incomplete reform agenda to meet its original aim, NK Singh also said. GST, introduced on July 1, 2017, replaced existing multiple flowing taxes levied by the central and state governments. NK Singh also said that the States have told him that they have little or no say in the GST revenue decisions.
Adding, NK Singh said the Commission is faced with the fact that the tax revenue buoyancy is very short, he added. GST collections by the central and state governments fell 5.3 per cent year-on-year to Rs 95,380 crore in October but saw marginal improvement over September collections. On a low GDP-to-tax ratio, NK Singh said that India needs a simple Direct Tax Code to raise this ratio. “How can a country like India even in a slowdown have a low tax-GDP ratio,” he said at the event. The compliance improves when tax collected is put to public use, NK Singh noted. The tax utilization is the flip side of tax collection, he said.
Finance Commission is awaiting additional terms of reference for J&K, Leh & Ladhak, he also said, adding he is uncertain of the additional time Finance Commission will need to work on J&K & Leh devolution formula. Adding, NK Singh said that the Commission hasn’t heard anything from the govt as yet.