After a gap of six months, the goods and services tax (GST) collections crossed the Rs 1-lakh crore mark in October (for September) primarily driven by festive demand, anti-evasion measures and finalisation of audit statements by businesses last month.
The GST collections in October stood at Rs 1,00,710 crore, the second time in the current financial year after April when the monthly GST collections topped the targeted Rs 1-lakh crore mark. Cumulatively, GST collections in the first seven months of 2018-19 are at Rs 6,78,680 crore. In April, when the mop-up was 1.03 lakh crore, it was mainly due to payment of arrears by businesses for March, the last month of previous financial year, which was accounted in the first month of the current fiscal. The monthly average revenue in 2017-18 (for the first eight months of GST rollout) had been Rs 89,885 crore.
The government attributed the higher GST mop-up in October to lower rates, less evasion and higher compliance. “The success of GST is lower rates, lesser evasion, higher compliance, only one tax and negligible interference by taxation authorities,” Finance Minister Arun Jaitley said in a tweet on microblogging website Twitter on Thursday.
The compliance rate inched higher, with 67.45 lakh businesses filing the summary GSTR-3B returns in October as against 67 lakh businesses filing GST returns in the previous month. The Finance Ministry in a statement said states which achieved “extraordinary growth” in total taxes collected included Kerala (44 per cent), Jharkhand (20 per cent), Rajasthan (14 per cent), Uttarakhand (13 per cent) and Maharashtra (11 per cent). Revenue concerns were raised by several states in the 30th GST Council meeting held on September 28. As per the data shared in that meeting, six states/union territories —Mizoram, Arunachal, Manipur, Nagaland, Sikkim and Andhra Pradesh — were posting a revenue surplus under the indirect tax regime, while rest 25 were facing a revenue shortfall ranging from 3 per cent to 42 per cent.
The 10 states/UTs which were said to be facing the highest revenue shortfall during April-August were Puducherry (42 per cent), Punjab and Himachal Pradesh (36 per cent each), Uttarakhand (35 per cent), Jammu & Kashmir (28 per cent), Chhattisgarh (26 per cent), Goa (25 per cent), Odisha (24 per cent), Karnataka and Bihar (20 per cent each). After the Council meeting in September, Jaitley had said that the states faced an average 16 per cent shortfall in GST revenue collections in the first year of implementation (July 2017-March 2018) that had narrowed to 13 per cent during April-August period of the current financial year.
Out of the total Rs 1,00,710 crore GST collections in October, Central GST (CGST) is Rs 16,464 crore, State GST (SGST) is Rs 22,826 crore, Integrated GST (IGST) is Rs 53,419 crore (including Rs 26,908 crore collected on imports) and cess is Rs 8,000 crore (including Rs 955 crore collected on imports), the Finance Ministry statement said. Tax experts said the revenue trend is expected to continue on the back of anti-evasion measures. Abhishek Jain, Tax Partner, EY India said, “While a possible reason for an upsurge in September could be FY17-18 closing adjustments, this trend could be expected to continue with implementation of anti-evasion measures like TDS/TCS etc.”
The government has settled Rs 17,490 crore to CGST and Rs 15,107 crore to SGST from IGST as regular settlement. Further, Rs 30,000 crore has been settled from the balance IGST available with the centre on provisional basis in the ratio of 50:50 between centre and states. “The total revenue earned by central and state governments after regular and provisional settlement in the month of October, 2018, is Rs 48,954 crore for CGST and Rs 52,934 crore for the SGST,” the statement added.