Revenue from the Goods and Services Tax touched ₹7.19 lakh crore between August 2017 and March 2018, according to official data, which pegs average monthly revenue at ₹89,885 crore for the period.
“This includes ₹1.19 lakh crore of CGST, ₹1.72 lakh crore of SGST, ₹3.66 lakh crore of IGST (including ₹1.73 lakh crore on imports) and ₹62,021 crore of cess (including ₹5,702 crore on imports),” the government said in a release on Friday. “For this eight months, the average monthly collection has been ₹89,885 crore.”
The government explained that while the tax on domestic supplies in a month is collected through the returns process and gets collected in the subsequent month, IGST and cess on imports get collected in the same month. For the current year, “GST on domestic supplies has been collected only in eight months from August 2017 to March 2018, IGST and cess on imports have been collected for nine months, from July 2017 to March 2018,” the release added. “Including the collection of July 2017, total GST collection in the financial year 2017-18 stands provisionally at ₹7.41 lakh crore.”
“The collection is below target as rate cuts were announced in the recent past and various refunds in case of export and other cases have also been cleared,” Abhishek A Rastogi, partner at Khaitan & Co, said in a note. “It is hoped that the compliance level will improve further and all assessees registered will start paying taxes, thereby leading to improved GST collections in the new financial year.”
“The average monthly collection under GST for FY18 was around ₹90,000 crore, [implying] a deficit of approximately 24% in reference to the estimations for this financial year, i.e., for FY 2018-19,” Abhishek Jain, tax partner at EY India wrote in a note. While the deficit was “apparently perturbing”, it was “expected to be reduced with e-way bills being in place and possible introduction of other anti-evasion measures like TDS/TCS, credit matching, etc,” he said.
Compliance levels have remained poor across the period, as shown by the percentage of registered taxpayers who have filed their returns by the due dates of the respective months. While this proportion was 57.7% for July 2017, it rose only to 62.6% by March 2018.
‘Further rate cuts’
“With the GSTN [GST Network] system working smoothly and no hindrances for generating e-way bills, the compliance level should increase further,” Parag Mehta, partner at NA Shah Associates, said. “With many States also introducing the intra-State generation of e-way bills for movement of goods, evasion is bound to reduce with a rise in revenue,” he said.
Official data showed that while many taxpayers miss their filing deadlines, they do eventually get down to filing their returns. For example, the data showed 96% of those who had to file returns for July 2017, had done so by March 2018.
Some tax analysts point at the tax revenue buoyancy and said the GST Council can consider further rationalisations in the GST tax rates.
“Collection for March is likely to exceed ₹1 lakh crore,” Pratik Jain, partner and leader, Indirect Tax, t PwC India, said. “After the introduction of e-way bills..., one could expect revenue buoyancy to continue. [The Centre] might want to consider further rate rationisation, particularly reducing the 28% items to 18%.”
