The stagnation in collections might also lead to tighter scrutiny of residual transitional credits and a slower pace in refunding the tax to exporters.
Goods and services tax (GST) collections for February fell to Rs 85,174 crore from Rs 86,318 crore a month earlier, heightening the government’s anxiety over revenue being far below projections. The average monthly central GST (CGST) collections in July-February has been just Rs 23,177 crore while the Centre’s monthly GST revenue for FY19 is budgeted to be more than double that at Rs 50,325 crore. Of course, integrated GST (IGST), roughly half of which has to go to the Centre’s kitty eventually, would give it another Rs 10,100 crore a month, going by the trend so far. But even that would take the Centre’s average monthly GST revenue so far to only Rs 33,300 crore, two-thirds of the budget estimate for next year. States are to be compensated for any revenue shortfall from the level a 14% annual growth from the 2015-16 base would entail, so subdued GST buoyancy is less of an immediate threat to their revenue.
Analysts felt that lower-than-expected GST revenue for the first two months of 2018 might force the government to hasten the introduction of anti-evasion measures such as invoice-matching and reverse charge on transactions with unregistered dealers, besides the e-way bill, which is slated to be rolled out from April 1. The stagnation in collections might also lead to tighter scrutiny of residual transitional credits and a slower pace in refunding the tax to exporters. The Central Board of Excise and Customs recently launched countrywide camps to manually rectify exporters’ entry in the GST Network portal to expedite refunds worth over Rs 10,000 crore. As FE reported earlier, the indirect tax department has instructed its field formations to carry out a more detailed verification of transitional credit claimed by the top 50,000 assessees. This is second round of verification after the earlier, more cursory attempt failed to find large divergence between claimed and invalid transitional credit, which stood at Rs 1.6 lakh crore at the end of the deadline.
“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 April 1. We should now expect the relaunch of reverse charge on transactions with unregistered dealers , invoice matching, more return scrutiny etc,” said MS Mani, partner, Deloitte India. According to a government statement, 59.51 lakh GSTR 3B (summary) returns had been filed for February, till March 25. This is 69% of total taxpayers who were required to file monthly returns, the government said. About 1.05 crore taxpayers now registered under GST so far. Out of these, 18.17 lakh were composition dealers, which are required to file returns every quarter, and the remaining 86.37 lakh assessees are required to file monthly returns.
The total collection of CGST and state GST stood at is Rs 27,085 crore and Rs 33,880 crore, respectively, in February, which included transfers from IGST by way of settlement. An amount of Rs 7,317 crore was collected in the month as compensation cess. GST collections dwindled from a high of over Rs 92,000 crore in July to around Rs 80,000 crore in November before rebounding to Rs 86,703 crore in December again fell marginally in January to Rs 86, 314 crore.