The GST collection for the month of February dipped marginally by Rs 1,000 crore to Rs 85,174 crore. But that's completely normal; the real reason for worry is this
The GST collection for the month of February dipped marginally by Rs 1,000 crore to Rs 85,174 crore. This is the second straight dip after the GST collection in December was recorded a three-month-high of Rs 88,929 crore. What can be understood from analysts is that the reason for the dip in the GST collection for February could be the fewer working days, thus, lesser sales and lesser taxes.
But what’s really worrying is that even after eight months of the implementation of the GST, the tax compliance for February has just been 69%. “The gradual increase in the percentage of GST return filers while being encouraging, still is quite low as it appears that 30% of taxpayers are not filing returns,” M S Mani, Partner, Deloitte India told FE Online.
“It must be noted that the 70% filers include those filing nil returns, hence the reasons for non-filing of returns by over 2 million registered taxpayers would be an area of concern for the tax authorities.”
There’s nothing much to be read into month-on-month fluctuations, analysts said. Overall, the average collection is about Rs 86,000 crore. However, the other thing to worry here is that the average collection is lower than government’s target of Rs 92,000 GST revenue every month. The government has already raised the fiscal deficit target for the fiscal year 2019 to 3.3%, against the previous plan of limiting it to 3%. “It appears that GST collections are now entering the stabilisation phase, although the expected revenue garnering appears to be taking more time,” M S Mani added.
The government is pinning hopes on the implementation of the E-Way bill to curb tax evasion. The collection figures for February being lower than expected, would lead to several anti-evasion measures over and above the imminent E-way bill launch on 1st April. We should now expect the relaunch of reverse charge on transactions with unregistered dealers, invoice matching, more return scrutiny etc, he said.
In the last two GST Council meeting, Finance Minister Arun Jaitley flagged concerns over lower GST collection, saying that they suspect tax evasion, especially by the companies that have opted for composition scheme. The collection in January was Rs 86,318 crore, while in December and November it was Rs 88,929 crore and Rs 83,716 crore.