India staring at over Rs 1 lakh crore GST revenue shortfall in FY19 despite October collection cheer

By: | Published: November 2, 2018 4:32 PM

In Budget 2018, the government had set the GST revenue target for the financial year 2018-19 at Rs 12 lakh crore, putting it at a monthly average of Rs 1.07 lakh crore.

The October GST collection at Rs 100,710 crore was higher than previous months mainly due to the onset of festive seasonThe October GST collection at Rs 100,710 crore was higher than previous months mainly due to the onset of festive season.

The Goods and Services Tax (GST) collection in October surpassed the target of Rs 1.07 lakh crore, mainly on the back of the onset of the festival season, putting the government in a slightly comfortable revenue position. However, the government may still miss its full fiscal year 2018-19 target by a whopping Rs 1.15 lakh crore. That would be an 8% miss on the government’s target of Rs 12.9 lakh crore.

The October GST collection at Rs 1,00,710 crore was higher than previous months mainly due to the onset of festive season, experts said. The government will, going forward, remain under pressure to continue with the base level GST collection.

“The fact that September heralds the festive season has also helped in improving collections,” M S Mani, Partner, Deloitte India told FE Online. “…there would be pressure on the revenue authorities to continue with a base level monthly collection of Rs 1 trillion (Rs 1 lakh crore),” Mani added.

In Budget 2018, the government had set the GST revenue target for the financial year 2018-19 at Rs 12 lakh crore, putting it at a monthly average of Rs 1.07 lakh crore. The total collection by the government in the first six months (May-October) has been Rs 5.75 lakh crore, averaging Rs 95,870 crore.

Assuming the best case scenario that the government continues meeting the Rs 1 lakh crore target in the remaining months (November- April) of FY19, the total collection would come at Rs 11.75 lakh crore (Rs 5.75 lakh crore plus Rs 6 lakh crore), short by Rs 1.15 lakh crore.

“Whether GST collections sustain above Rs 1 trillion per month during the festive months, as well as in the remainder of FY19, remains to be seen,” Aditi Nayar, Chief Economist, ICRA said.

Several measures such as the implementation of the E-way bill and the annual audit are expected to plug tax evasion furthermore and stabilise GST collection at around Rs 1 lakh crore. Finance Minister Arun Jaitley said that lower rates, lesser evasion, higher compliance, fewer cases of interference by tax authorities have helped the government meet the GST revenue target in October.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition