At Rs 867.03 bn, GST receipts short of target for third month in a row | Business Standard News–27.01.2018

Goods and services tax (GST) collections for December did not deliver much comfort to the government ahead of the Budget 2018, although these rose after two months of declines. GST collections at Rs 867.03 billion were less than the target of Rs 910 billion combined for the Centre and states. The figures, released by the finance ministry on Thursday, highlighted subdued collection in the composition scheme — a flat rate provided to taxpayers who do not seek input tax credit. The government thinks evasion in this scheme will be plugged by the e-way bill, which will be introduced for the inter-state movement of goods on February 1. December was the third straight month when the GST revenue was below Rs 900 billion. The tax yielded Rs 808.08 billion in November and Rs 833 billion in October. GST receipts have fallen short of target in August, October, November and December. The target of Rs 910 billion is based upon the Centre’s budget estimates for 2017-18 and presumptive growth figures for states for grant of compensation in the case of a revenue shortfall after switching to the GST. “The increase in revenue collection is on expected lines and means that the GST is stabilising and transition issues are waning. Anti-evasion measures being taken by the government are likely to result in a further increase in revenue in the January-March quarter,” said Pratik Jain, leader, indirect tax, PwC. Finance Secretary Hasmukh Adhia had earlier said the indirect tax collection target would be met for the current fiscal year after the GST Council decided to split Rs 350 billion of the integrated GST equally between the Centre and states. The Budget has targeted indirect tax collections of Rs 9.26 trillion and the government has collected Rs 5.87 trillion in the first nine months of 2017-18.

Direct tax collections rose over 18 per cent till January 15 against the budget estimate of 15 per cent growth. Disinvestment proceeds will also yield Rs 200 billion more than the budget projections. The Centre will, however, face difficulty in non-tax revenues because of low dividend by the RBI and spectrum sale receipts. The government is expected to lean on public sector units to narrow this gap. So far as the composition scheme is concerned, Rs 4.21 billion was paid by assessees in the second quarter, marginally higher than Rs 3.36 billion in the first quarter. Officials, sensing evasion, said collections would improve once the e-way bill was introduced. Compliance has been improving with 66.7 per cent of GST assessees filing returns in December against 64.3 per cent in November and 62 per cent in October. In the composition scheme, 54 per cent of assessees filed returns in October-December.

via At Rs 867.03 bn, GST receipts short of target for third month in a row | Business Standard News

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