Nirmala Sitharaman Says 90% Of GST Paid By Top 22% Businesses

Around 90% of the goods and services tax was paid by the top 22% of businesses in India having a turnover of over at least Rs 50 crore, Union Finance Minister Nirmala Sitharaman said in Parliament on Tuesday.

An Oxfam International report had said that 64% of the total Rs 14.83 lakh crore GST came from the bottom 50% of the population in terms of income group in 2021–22, with only 3% of the GST coming from the top 10%.

Sitharaman's written reply in the Lok Sabha was in response to a question based on the report. The minister said the report was based on "various improbable assumptions and not irrefutable or verifiable facts". It was not possible to calculate the amount of GST paid and who exactly paid it, she said.

According to her, the report with respect to indirect taxes was based on estimated expenditure on certain food items and non-food items. "Thus, the percentage is not with respect to the total GST revenue, but GST from only some select items. It is not known as to what items have been taken by the Oxfam report."

Since it is an indirect tax, GST is collected from suppliers of goods and services, and not from the ultimate consumers of goods and services, according to Sitharaman.

To be sure, the liability to deposit GST is with the supplier of goods and services but the levy is passed on to consumers.

To keep the incidence of taxation low on items of mass consumption, goods like unpackaged food grains, fruits and vegetables, and services like education and health are exempted from the GST. Items like edible oil, lifesaving medicines and fertilisers are all in the lowest 5% tax slab, she said.

Oxfam's annual inequality report was released on Jan. 16, the first day of the World Economic Forum's annual meeting at Davos. The supplement on India also said that the richest 1% in India now own more than 40% of the country's total wealth, while the bottom half of the population together share just 3% of wealth.