Finance Minister Dismisses Oxfam Report on GST Collections

India’s Finance Minister Nirmala Sitharaman dismissed a recent Oxfam report which stated that the poorest 50% of India’s population contributed two-thirds of the country’s Goods and Services Tax (GST) revenues. Sitharaman explained that the GST is a consumption tax collected from suppliers of goods and services and not from the ultimate consumers of these goods and services. Therefore, it is not possible to calculate exactly how much GST is paid by whom.

Sitharaman also clarified that 90% of India’s GST is paid by the top 22% of businesses with a turnover above INR 50 crore, citing data from return filings. To keep the incidence of taxation low on items of mass consumption, essential items such as unpackaged food grains, fruits and vegetables, education, and healthcare services are exempt from GST, while goods like edible oil, lifesaving medicines, and fertilizers are in the 5% slab.

The Oxfam report was based on estimated expenditures on certain food items and non-food items. It stated that 64.3% of the total GST collected from these items came from the bottom 50% income group and 3%-4% from the top 10% income group. However, Sitharaman clarified that the percentage was not with respect to the total GST revenue but only from selected items, and it was unclear which
items were considered by Oxfam.

The Minister of State for Finance Pankaj Chaudhary noted that it is not possible to calculate the contribution of different income groups to the GST as the government does not take consumer invoice data, nor does the invoice have information on the income of the consumer.

Staff Reporter