Updated: December 2, 2019 3:58:34 am
After contracting for two months, the Goods and Services Tax (GST) collection in November (for October) rose by 6 per cent to Rs 1,03,492 crore from Rs 97,637 crore in the same month a year ago, marking the fourth instance of a level above Rs 1 lakh crore this fiscal year.
Most experts ascribed the rise in GST revenues to festive demand, with Diwali being celebrated in October and some improvement in compliance due to anti-evasion measures, but refrained from terming it as a reversal of slowing revenue trend.
The uptick in GST revenues was primarily driven from domestic sales, as GST collection on imports continued to stay in the negative territory — contracting by 13 per cent as against contraction of 20 per cent last month, a Finance Ministry release showed. The total number of GSTR 3B returns (summary returns) filed by GST taxpayers for October (up to November 30) showed improvement in compliance rate, rising to 77.83 lakh from 73.83 lakh in the previous month.
Indirect tax collections have been slowing over the past three months, reflecting the continued weakness in consumption demand. Along with the corporate tax rate cut announced by the government and flagging direct tax revenues, the Centre could face a steep challenge in meeting its fiscal deficit target for this financial year, if this uptick in GST collections does not sustain in the coming months.
“The gross GST revenue collected in November, 2019 is Rs 1,03,492 crore of which CGST is Rs 19,592 crore, SGST is Rs 27,144 crore, IGST is Rs 49,028 crore (including Rs 20,948 crore collected on imports) and Cess is Rs 7,727 crore (including Rs 869 crore collected on imports),” the Finance Ministry statement said.
Tax experts said while the pickup in GST revenues in November is encouraging, but not much can be read into it and the trend will have to sustain to help in meeting the government’s Budget targets Pratik Jain, partner & leader, indirect tax, PwC said, “While increase in collection is encouraging, it’s difficult to read too much into the collection for one month, particularly because October was also a month of festivals. We need to see what’s the trend. The Centre has taken steps in the right direction by simplifying the compliances, going after tax evaders by more efficient use of technology/data analytics and not falling for the temptation of increasing the rates. These efforts, coupled with the introduction of e-invoicing from next year, should lead to a gradual increase in GST collections as well, though it would also depend upon overall economy.”
Ramaratnam Muralidharan, senior director, Deloitte India, said, “It is too early to draw any conclusion whether the collections are on a growth path. The increase to some extent may be due to the additional spending in October due to Diwali … We need to wait and see for the next 2-3 months if the impact of better tax compliance is able to result in consistent higher collections.”
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