New Delhi : Economic Affairs Secretary S C Garg Tuesday said the temporary disruptive effect of the Goods and Services Tax (GST) is over as the manufacturing sector recorded positive growth of 3.1 per cent in August. Commenting on the twin data on industrial output and price situation, he said that the benign and moderate inflation has become the order of the day. “Manufacturing grew by 3.1 per cent in August after two months of negative growth of -0.5 per cent and -0.3 per cent. Temporary disruptive effect of GST is over,” he said in a tweet.
Overall, industrial production grew at a nine-month high of 4.3 per cent in August, mainly on account of robust performance of mining and power sectors coupled with higher capital goods output.
India’s economic growth slipped to a three-year low of 5.7 per cent in the first quarter of the current fiscal. Despite slowdown, the Reserve Bank of India at its policy review meeting earlier this month kept the key interest rate unchanged at 6 per cent, citing upward trend in inflation. “Benign and moderate inflation is the order of the day with consumer inflation of 3.3 per cent in September. Food inflation remained 1.8 per cent only,” he said in another tweet. Entire list of 28% GST to be revised
The government has belatedly admitted its irrational decision of putting a large number of goods in the highest 28 per cent slab of the Goods and Services Tax (GST). It has now constituted a fitments committee of officials to review the entire list of items put in this slab.
Revenue Secretary Hasmukh Adhia, who is an overall incharge of the GST implementation, revealed the blunder of putting a lot many items in the 28% tax bracket on the basis of the excise duty and VAT (value added tax) rate applicable to them. Nobody at that time pointed out that 95% of these items are produced by the MSME (minor, small and medium enterprises) who enjoyed the excise duty exemption, Adhia disclosed in a discussion on the GST by a business news channel.
Instead of piecemeal tweaking of the rates, the officials have been asked to have a look at the entire list of the items attracting 28% tax. They are doing detailed calculations on the revenue impact to check how much the government (Centre and States) got from these items from excise duty and VAT before the wholesale reduction of the rates, Adhia said.
Optimistic outlook
the manufacturing sector recorded positive growth of 3.1 per cent in August
28% GST slab need to be slashed
