Recording a decline for the second consecutive month, goods and services tax (GST) revenue collections for February stood at Rs 85,174 crore (till March 26), Ministry of Finance said in a statement. Though 69 per cent of the assessees required to file GST returns filed for February — the same as that for January — the overall GST collections were 1.3 per cent lower than the revenue collected in the previous month and 9.5 per cent lower than the mop-up of July, the first month of the indirect tax regime.
The fall in GST revenue for February came after rate cuts and clarifications for about 29 goods and 54 categories of services in January announced by the GST Council in its 25th meeting. It was the fourth time that the Council had rationalised rates under the new indirect tax regime.
For February, Rs 14,945 crore has been collected as Central GST (CGST) as on March 26, slightly higher than Rs 14,233 crore collected a month ago (as on February 25), official data showed. Rs 20,456 crore has been collected as State GST (SGST) as against Rs 19,961 crore a month ago. Integrated GST (IGST) collections for February stood at Rs 42,456 crore, lower than Rs 43,794 crore collected in previous month, while compensation cess revenue stood at Rs 7,317 crore as against Rs 8,331 crore in previous month.
For February, 59.51 lakh GSTR-3B returns were filed till March 25. Total 1.05 crore taxpayers have been registered under GST so far till March 25, out of which, 18.17 lakh are composition dealers which are required to file returns every quarter and the rest 86.37 lakh taxpayers are required to file monthly returns.
GST collections have been declining since December. The government had garnered Rs 86,318 crore for January (as on February 27), Rs 86,703 crore for December (as on January 25), Rs 80,808 crore for November (as on December 26). Total GST revenue for October was Rs 83,346 crore (as on November 27), Rs 92,150 crore for September (as on October 23), Rs 90,669 crore for August (as on September 26) and Rs 94,063 crore for July (as on August 31).
Tax experts said that the slide in collections would upset government’s expectations of rise in GST mop-up and now the focus would be on anti-evasion measures such as e-way bill to boost collections. Abhishek Jain, Tax Partner, EY India, said, “The GST collections for February have declined slightly as compared to last months. This would upset the government expectations of enhanced GST collections. The next big hope for the government would be introduction of E-way bills from April 1, which may provide a boost to GST collections.”
Others said that since transitional credits would have been utilised, GST collections should now progressively improve. Also, the government may consider bringing in more anti-evasion measures such as reverse charge mechanism and returns scrutiny. M S Mani, Partner, Deloitte India said, “It would be logical to assume that significant amount of transition credits availed would now have been utilised, hence the collections would now progressively improve. The collection figures for February being lower than expected, would lead to several anti-evasion measures over and above the imminent e-way bill launch on April 1. We should now expect the relaunch of reverse charge on transactions with unregistered dealers, invoice matching, more return scrutiny etc.”
After the dip in GST collections in October, the government had pushed for an early implementation of the e-way bill system as an anti-evasion measure from February 1 though it could not go through as the online system for it crashed on the first day of the rollout, forcing the government to continue only with the trial run for trade and transporters. The government is now set to implement e-way bill for inter-state movement of goods exceeding Rs 50,000 in value and 10 km in travel from its initially approved rollout date of April 1.
The e-way bill is being touted as an anti-evasion measure that would help boost tax collections by clamping down on tax evasion.