GST Collections Drop Below Rs 1 Lakh Crore In October
GST collections dipped below Rs 1 lakh crore in October
The government's goods and services tax collections dropped below Rs 1 lakh crore in October, suggesting that collections have still not risen to the desired level.
GST collections in October were at Rs 97,637 crore, finance ministry said in a statement. This compares with Rs 1 lakh crore collected in September and Rs 94,442 crore in August.
According to budget documents, the government's GST collection target is set at Rs 13.47 lakh crore. This has been calculated considering SGST collected by all states will be equal to CGST, as GST is equally split between the consuming state and the centre. So far GST collections for the current financial year are at Rs 6.72 lakh crore.
While GST collection in October has fallen vis-a-vis the earlier month, it is higher than the average monthly collection in the year. This steady increase in average collection gives hope that regular monthly collections will hit Rs 1 lakh crore soon.Abhishek Jain, Indirect Tax Partner, EY India.
Compliance during the festive month improved. 69.6 lakh GSTR-3B returns were filed as on November 30, compared to 67.45 lakh returns filed for the month of September.
The tax collected under various heads includes:
- Central GST of Rs 16,812 crore.
- State GST of Rs 23,070 crore.
- Integrated GST stood of Rs 49,726 crore.
- Compensation cess of Rs 8,031 crore.
Post settlement of IGST funds based on end consumption, CGST collected in October was Rs 35,073 crore, while SGST was Rs 38,774 crore.
The central government also released Rs 11,922 to states as GST compensation for the months of August-September 2018. Central government compensates states bi-monthly for the losses they incur in the first 5 years of GST implemention. The compensation is calculated based on an annual increase of 14 percent in taxes subsumed under GST keeping 2015-16 as the base year.
GST collections seem to have witnessed an upward trend over the last few months, leaving aside an exceptional last month which saw higher collections due to the festive season, said Krishan Arora, an indirect tax partner at Grant Thornton India LLP. He added that the consistent efforts made by government have also resulted in better compliance by taxpayers.
GST collections have remained below expectations so far this financial year, adding to uncertainty over the government’s ability to meet its fiscal deficit target of 3.3 percent of GDP. Data released on Friday showed that the government had already exceeded its fiscal deficit target in the April-October period.
In a note released earlier this week, India Ratings said that it expects the fiscal deficit to once again touch 3.5 percent of GDP.
“The pressure on government finances is mainly arising from the revenue side, particularly from indirect taxes and non-tax revenue. India Ratings’ estimate suggests a tax revenue shortfall of Rs 22,400 crore, which is expected to originate from indirect taxes,” said Devendra Kumar Pant, chief economist at India Ratings.