Rating agency Moody\u2019s on Monday said the recent GST rate cuts on 88 items will weigh on government\u2019s revenue collection and is \u2018credit negative\u2019 as it will put pressure on efforts of fiscal consolidation.<\/p>\n
\u201cWe estimate revenue loss from the most recent tax cuts to be about 0.04%-0.08% of GDP annually.<\/p>\n
\u201cAlthough the proportion of revenue loss is small, the vacillation in tax rates creates uncertainty around government revenue and comes amid persistent upside risks to its expenditures,\u201d Moody\u2019s said in a statement.<\/p>\n
It said the government had budgeted gross tax revenue growth of 16.7% for the current fiscal, which ends March 2019, and GST collections will be an important driver of future government revenue because of a wider tax base and tax buoyancy.<\/p>\n
\u201cThe tax cuts, which follow cuts in January 2018 and November 2017, will weigh on the government\u2019s revenue collections and are credit negative because they will pressure the government\u2019s fiscal consolidation effort, which is already diminished relative to the original fiscal deficit targets set last fiscal year,\u201d Moody\u2019s said.<\/p>\n
The government expects GST revenue to add up to an additional 1.5% of GDP in the medium-term. Despite initial disruptions to the GST implementation, GST collection has increased since December 2017, but iterative changes to tax rates create downside risks to the target of Rs 7.4 lakh crore ($100 billion) for the full fiscal year, it added.<\/p>\n
As per estimates, the recent goods and services tax (GST) rate cut would lead to a revenue loss of about Rs 8,000-10,000 crore, but the government expects that more compliance and demand would lead to revenue buoyancy which would offset the loss.<\/p>\n","protected":false},"excerpt":{"rendered":"
Rating agency Moody\u2019s on Monday said the recent GST rate cuts on 88 items will weigh on government\u2019s revenue collection and is \u2018credit negative\u2019 as it will put pressure on efforts of fiscal consolidation. The GST Council, chaired by Union Finance Minister, last week cut tax rates on white goods as well as various handicrafts […]<\/p>\n","protected":false},"author":1,"featured_media":37792,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-37790","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/37790","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=37790"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/37790\/revisions"}],"predecessor-version":[{"id":37793,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/37790\/revisions\/37793"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/37792"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=37790"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=37790"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=37790"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}