After rising to Rs 1.02 lakh crore in January, goods and services tax (GST) collections slid to Rs 97,247 crore in February (for January), data released by the Finance Ministry Friday showed. The compliance rate remained broadly at the same level with 73.48 lakh businesses filing summary GSTR-3B returns as against 73.3 lakh businesses filing returns in January, the data showed.
The slide in revenue collection reflects the impact of rate cuts on 17 goods and six services which were announced by the GST Council on December 22 and came into effect from January 1.
The GST collections, however, are 13.12 per cent higher than Rs 85,962 crore collected as GST revenue in February 2018. Cumulatively, the Centre has collected Rs 10,70,793 crore as GST revenue in April-February, the first eleven months of this fiscal.
In the Interim Budget for 2019-20, presented on February 1, the government had already scaled down the GST collection target by Rs 1 lakh crore, with revised estimate for 2018-19 pegged at Rs 6.44 lakh crore as against the Budget target of Rs 7.44 lakh crore.
Of the total Rs 6.44 lakh crore GST collections pegged in Budget 2018-19, the Centre had aimed to collect Central GST (CGST) of Rs 5.04 lakh crore and Integrated GST (IGST) of Rs 50,000 crore. In theory, IGST is supposed to be equally divided between Centre and the states. Adding State GST (SGST) collections equivalent to CGST would mean the total GST collections for both states and Centre is pegged at Rs 11.48 lakh crore as against Rs 13.48 lakh crore estimated earlier. For the fiscal 2019-20, GST collection target has been budgeted at Rs 13.71 lakh crore.
GST collections have been under strain due to the sleep of relief measures and rate cuts announced under the indirect tax regime that has been estimated to create a dent of Rs 80,000 crore a year. Furthermore, leakages and tax evasion have been concerns for the government in the new indirect tax regime.
Tax experts said expansion of tax base and plugging of leakages and evasion will be crucial to boost GST collections going ahead.
“The shortfall in GST collections in February suggests that we are yet to settle at the one lakh crore level. In the eleven months in this financial year only thrice the one lakh crore level was breached. Revival of economic growth and better compliance/control of tax leakages could help to grow the GST collections,” R Muralidharan, senior director, Deloitte India said.
Pratik Jain, partner, and leader, Indirect Tax, PwC India, said, “We have seen that collection of over Rs 1 lakh crore in a month has typically come in last month of the quarter only. So a slight reduction doesn’t seem to be a cause for worry. The real question is how does the government achieve the next year’s target which is around 20 per cent higher than the current fiscal, with little leg room to increase the rates. Tax evasion and leakages still seem to be a huge problem for the government.”