GST rates will fall as collections increase, evasion falls: Arun Jaitley

New Delhi: There will be further scope to reduce tax rates and slabs as collections under the goods and services tax (GST) rise significantly and evasion comes down, Union minister Arun Jaitley said on Sunday on the occasion of the tax reform completing one year of implementation.

Speaking on GST day, Jaitley said the reform was not as disruptive as initially envisaged and, along with the direct tax, should further help in improving the tax to GDP ratio by another 1.5 percentage points in the next few years.

“After one year of experience I’m not too sure whether I can use the word disruptive for GST reform. The smooth manner in which the change has taken place is almost unprecedented anywhere in the world,” Jaitley said adding that going ahead, in the medium to long term, GST should help in increasing India’s GDP, improve ease of doing business, promote Make in India and expand trade.

“I am confident that the best of GST in terms of its contribution to society is yet to come,” he said.

India’s tax to GDP ratio is budgeted to increase to 12.1% in 2018-19 as against 10.8% in 2015-16.

Despite teething problems initially, when annualized, GST revenues have grown by 11.9% showing a tax buoyancy of 1.2, Jaitley said adding that the tax payer base has also increased significantly.

Finance minister Piyush Goyal said the government is not perturbed by misgivings that it will not get voted back to power in 2019 after implementation of GST.

Goyal expressed confidence that revenues in 2018-19 will cross Rs13 trillion.