To save consumers from sudden price shocks, the government could look at a calibrated increase in the goods and services tax (GST) rates as it seeks to raise revenue collections, according to an Economic Times report. A panel of officials comprising from both the states and the centre is reviewing the current GST rate structure with an aim to boost revenue, the report adds.

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About 150 items that are exempt from GST are likely to be reviewed along with other 260 items currently under the 5 percent slab, the report said.

Processed items cannot be in the lowest slab or the exempt category because it also leads to problems of input tax credits for them and erodes their competitiveness, ET report quoted an official as saying.

GST collections have averaged Rs 1,00,646 crore so far in the current financial year, short of about Rs 1.12 lakh crore a month needed to meet the budget target, the report added.

The panel's suggestions are likely to be examined by the GST Council in its next meeting. The latter is the apex decision making body for the tax.

The official panel is also looking at how to minimise exemptions in both goods and services and raise the revenue-neutral rate — that single rate of GST at which there is no loss of tax, the report said.

The panel had highlighted an over Rs 63,000 crore shortfall in compensation cess in the current fiscal, which, with moderate revenue growth, is a key challenge, the report said.

Meanwhile, the November GST collected in December did not see any major improvement and stands at just over Rs 1.03 lakh crore. While it did cross the Rs 1 lakh crore mark for the second month in a row, this is well below the central government’s target of Rs 1.10 lakh crore every month.

However, almost all states and union territories, barring Jharkhand and Lakshadweep, saw their collections improve in December.

First Published:Jan 2, 2020 9:09 AM IST