GST mop-up tops Rs 1 lakh crore, second month in row

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Written by

Aanchal Magazine

| New Delhi |


Updated: January 2, 2020 10:36:21 am


The average GST revenue for April-December, the first nine months of this financial year, now stands at Rs 1,00,928 crore, 4.3 per cent higher than average of Rs 96,782 crore in the same period in 2018-19.

After two consecutive months of contraction inSeptemberandOctober, Goods and Services Tax (GST) collections in December (for November sales) rose over the Rs 1-lakh crore mark, a growth of 8.9 per cent year-over-year.In November too,the GST mop-up had topped Rs 1 lakh crore, but December figures were keenly awaited since the November collections were largely attributed to higher festive sales.

In December, GST collections at Rs 1,03,184 crore were marginally lower than the previous month, but a rise for the second month in a row indicates improvement in revenue growth and a higher compliance due to enforcement of more anti-evasion measures and a cap on input tax credit.

Until December 31, as many as 81.21 lakh GSTR 3B (monthly summary returns) were filed, 4.3 per cent more than 77.83 lakh in November. Also, a cap on input tax credit at 20 per cent of the eligible credit for businesses effective October helped in higher collections. This cap, which was only for buyers whose suppliers did not upload invoices, prevented fraudulent claims and revenue leakage, said tax officials.

Explained

Opens space for GST 2.0

WITH the slowdown impacting GST collections, the Centre has started to tighten enforcement measures to check revenue leakages. In December, these efforts have shown results with number of summary returns increasing 4.3 per cent compared with the previous month. Monthly GST revenues stabilising at Rs 1 lakh crore level will give the flexibility to further streamline the GST structure.

In fact, the input tax credit has been further curtailed to 10 per cent in the GST Council meeting on December 18.

The average GST revenue for April-December, the first nine months of this financial year, now stands at Rs 1,00,928 crore, 4.3 per cent higher than average of Rs 96,782 crore in the same period in 2018-19. State-wise breakup for the monthly gross GST revenue, released for the first time, showed an average growth of 12.7 per cent for the non-special category states.

GST revenue growth in December was derived mainly from domestic transactions, which grew 16 per cent even as revenue from imports contracted. The Integrated GST (IGST) on import of goods declined 10 per cent in December, though the pace of decline improved from 13 per cent last month and 20 per cent decline in October.

Tax experts said with the exception of September and October, GST collections now seem to stabilise over the Rs 1 lakh crore mark, but may fall short of the annual targets. This would require the government to take more measures to sustain and improve GST revenues at the level of Rs 1 lakh-plus crore. Abhishek Jain, Tax Partner, EY said, “It seems that efforts of the government, like restriction on availment of unmatched credits, to plug GST evasion is bearing results.”

M S Mani, Partner, Deloitte India, said, “With the trend of improving collections and the e-invoicing and new returns slated in the coming months, it is now expected that the GST collections would show a steady improvement, although it may still fall short of the annual targets. If the trend of GST collections in excess of Rs 1 lakh crore per month continues for the next few months, it would enable a renewed focus on GST 2.0 without being overly worried on the impact on collections.”

Of the total Rs 1,03,184 crore GST revenue, Central GST (CGST) is Rs 19,962 crore, State GST (SGST) is Rs 26,792 crore, Integrated GST (IGST) is 48,099 crore (including Rs 21,295 crore collected on imports) and cess is Rs 8,331 crore (including Rs 847 crore collected on imports).

The government aims to collect approximately Rs 11.89 lakh crore GST revenue on a gross basis in the current financial year, which translates into a monthly target of Rs 99,112 crore. The Centre has estimated Rs 1.09 lakh crore as compensation cess in the Budget for the current financial year, while cess collection till November was Rs 72,859 crore.

The Centre’s share in GST has been behind targets, with the Central GST collection during April-November falling short of the budget estimate by nearly 40 per cent, as per data shared in Parliament. In December, the revenue department had reset the targets for both direct tax and GST for remaining part of this financial year. For four months (December-March), GST authorities were asked to collect Rs 4.55 lakh crore (Rs 1.10 lakh crore for three months each and Rs 1.25 lakh crore in one month).

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