Finance minister Arun Jaitley on Wednesday expressed optimism over an improvement in tax collections after the roll out of Goods and Services Tax hopefuly from July 2017.
“In the last two years, tax buoyancy has improved. For 2016-17, the budget estimate was Rs 16.25 lakh crore. We revised it up to Rs 17 lakh crore. It is possible to surpass even the revised target as well. For 2017-18, the target for tax collection is set at Rs 19.25 lakh crore,” Jaitley said replying to lawmakers query on the Finance Bill.
“We expect a big change in tax collection from July. The GST Council has finalised the legislation after arriving at a consensus of all issues in the last 12 meetings,” he said adding the government is trying to implement the GST.
The last date for GST roll out is September 15 but we are trying it from July, he said.
The Cabinet recently approved the four crucial bills—CGST, IGST, UT-GST and Compensation Rule—needed to roll out GST.
The GST Council has already finalized a four-slab GST structure of 5%, 12%, 18% and 28%.
Earlier, Jaitley highlighted that the GST will help lower prices and make tax evasion difficult.
Speaking at the 23rd Commonwealth Auditors General conference, Jaitley also said India can attain economic growth of 7-8% and even higher if the global economy picks up.
Justifying demonetisation, Jaitley said it will act as a disincentive towards continuing to deal with shadow economy, and integration of informal with formal economy will increase the size of the GDP and make it cleaner.
“The biggest taxation reform what we are trying to implement from July 1 is Goods and Services Tax. It will increase the volume of taxation, there is no tax on tax and therefore makes goods, commodities and services little cheaper and far more convenient,” Jaitley said.
He said the tax department is trying to make the I-T backbone so strong so that evasion becomes difficult and hence only limited number of cases are taken up for scrutiny.
“The laws which enable this (GST) are now before Parliament which hopefully should get cleared and once they do get cleared then by the middle of this year we hope to see the implementation as far as this law is concerned,” Jaitley said.
Once implemented what is currently the most complicated tax system in the world will become one of the simplest tax system in the world, Jaitley said.
The Union Cabinet this week cleared four supplementary GST legislations which will be introduced in Parliament in the ongoing budget session.
As regards growth, Jaitley said India would continue to remain amongst the fastest growing economies of the world.
“For the last three years we have been the fastest growing major economy, we will continue to be in that phase. I think for India to achieve the growth rate of 7-8 per cent is reasonably logically plausible.
“If big growth returns to the world we probably can push upwards,” (With inputs from PTI)