The finance ministry on Friday said that the Revenue Gap of each State is coming down over the last eight months, even as FY18 GST collections came in at Rs 7.41 lakh crore. “The Average Revenue Gap of all the States for the last year is around 17 %,” the ministry of finance tweeted. A revenue gap exists if collections under the new indirect tax regime fall short of growth compared to last year’s. In such cases, the states are entitled to compensation from the Centre. The shortfall is now calculated on a monthly basis as GST was launched in a truncated financial year.
A recent World Bank report said that the implementation of GST may provide an additional impetus to revenue collections in the medium-term. The World Bank predicted an economic growth of 7.5% in 2019-20. We take a closer look at the GST numbers release today.
During the year 2017-18, total revenue collections under GST in the period between August 2017 and March 2018 moved up to Rs 7.19 Lakh Crore. The ministry said that including the collection of July, 2017, the total GST collections during the Financial Year 2017-18 stands provisionally at Rs. 7.41 Lakh Crore.
This total revenue includes Rs.1.19 lakh Crore of CGST, Rs.1.72 lakh Crore of SGST, and Rs.3.66 lakh Crore of IGST (including Rs. 1.73 Lakh Crore on Imports) and Rs. 62,021 crore of cess (including Rs. 5702 crore on imports).
For these eight Months, the Average Monthly Collection has been Rs. 89,885 crore.
Total Compensation released to the States for a period of 8 months during the last FY 2017-18 was Rs. 41,147 Crore to ensure that the Revenue of the States is protected at the level of 14% over the base year Tax collection in 2015-16.