Revenue implications prevent complete rationalisation of 28% slab

GST council likely to focus on 5% and 12% rate slabs

by Arjit Singh Bhambra

With recent rationalisation of the 28 per cent slab rate, the GST council is now likely to focus on 5 and 12 per cent rate slabs to further streamline the GST structure, as per a report in Economic Times. The council is also likely to consider inclusion of real estate and petroleum products under GST. However, revenue implications prevented complete rationalisation of the highest slab rate. The council’s decision to lower tax rate for 178 items to 18 per cent from 28 per cent would reduce tax revenue collections by about Rs.200 billion annually [see here]. Senior government officials believe that there is a scope for further lowering of tax rates on items of common-use. However, any further rationalisation will happen only after GST settles down and as more clarity emerges on the revenue impact.

References
1. https://economictimes.indiatimes.com/news/economy/policy/next-step-in-gst-recast-lower-end-of-tax-slabs/articleshow/61620482.cms
CMIE STATISTICS
Unemployment Rate
Per cent
5.5 -0.2
Consumer Sentiments Index
Base September-December 2015
95.8 0.0
Consumer Expectations Index
Base September-December 2015
93.9 0.0
Current Economic Conditions Index
Base September-December 2015
98.7 0.0
Quarterly CapeEx Aggregates
(Rs.trillion) Dec 16 Mar 17 Jun 17 Sep 17
New projects 2.33 3.79 2.06 0.99
Completed projects 1.01 1.94 1.14 0.99
Stalled projects 1.13 0.70 2.66 0.64
Revived projects 0.18 0.67 0.30 0.22
Implementation stalled projects 0.82 0.33 0.67 0.61
Updated on: 20 Nov 2017 8:20PM
Quarterly Financials of Listed Companies
(% change) Dec 16 Mar 17 Jun 17 Sep 17
All listed Companies
 Income 6.2 10.2 9.9 8.6
 Expenses 6.3 11.9 10.1 9.9
 Net profit 40.3 15.7 -19.1 -17.8
 PAT margin (%) 6.1 6.0 5.4 6.0
 Count of Cos. 4,507 4,438 4,288 2,730
Non-financial Companies
 Income 5.9 11.8 10.6 8.6
 Expenses 7.2 15.6 10.8 8.6
 Net profit 24.5 -2.5 -24.4 -4.9
 PAT margin (%) 6.2 6.2 5.3 6.9
 Net fixed assets 6.9 10.0
 Current assets 2.6 2.1
 Current liabilities 8.8 9.9
 Borrowings 4.8 4.1
 Reserves & surplus 6.2 8.1
 Count of Cos. 3,488 3,439 3,340 1,994
Numbers are net of P&E
Updated on: 20 Nov 2017 8:29PM
Annual Financials of All Companies
(% change) FY14 FY15 FY16 FY17
All Companies
 Income 10.0 5.2 1.1 6.6
 Expenses 9.9 5.2 1.2 6.8
 Net profit -2.2 1.6 -12.9 20.2
 PAT margin (%) 3.2 3.2 2.9 6.5
 Assets 12.3 9.4 9.6 8.8
 Net worth 9.6 8.7 10.3 8.5
 RONW (%) 6.2 6.1 5.1 9.6
 Count of Cos. 23,895 23,579 20,184 3,629
Non-financial Companies
 Income 9.7 4.3 0.1 6.5
 Expenses 9.3 4.5 -0.6 7.4
 Net profit -2.7 -5.5 11.5 14.3
 PAT margin (%) 2.2 2.1 2.6 6.5
 Net fixed assets 11.6 13.4 15.1 7.3
 Net worth 8.2 7.1 10.6 7.2
 RONW (%) 5.1 4.9 5.4 11.0
 Debt / Equity (times) 1.1 1.1 1.1 0.6
 Interest cover (times) 2.0 1.9 2.0 3.7
 Net working capital cycle (days) 69 67 66 50
 Count of Cos. 19,154 19,053 16,707 2,782
Numbers are net of P&E
Updated on: 15 Nov 2017 2:29PM

Data added for HPI at Assessment prices and HPI at Market prices