Collections highest so far, yet are way short of budget projection; analysts say buoyancy improving
The goods and services tax (GST) collections for March exceeded Rs 96,000 crore by April 23, the largest mop-up for any month since the comprehensive indirect tax’s launch in July last year, an official source said. The March collections could cross the coveted Rs 1 lakh crore mark by April-end, as payments are still being made by a section of taxpayers with late penalties, analysts feel. The forecast is based on the customary spurt in tax payments in the last month of the financial year and the fact that only 55 lakh assessees had paid the tax by April 23 — three days past the deadline for payment without fines — against an average of around 65 lakh in the previous months.
However, the Centre is still far from meeting its own projections of GST revenue; for now, GST revenue is less of a problem for states as 14% annual GST revenue growth is guaranteed to them for five years, under a compensation mechanism. Of the total GST collections, the Centre’s share (CGST) has so far been 30% (though CGST share was even lower in the initial months, when the accumulated integrated GST (IGST) pool was apportioned, it share subsequently went up). With the March figures also in, the average monthly GST mop-up so far has been close to Rs 90,000 crore, which means a CGST share of Rs 27,000 crore. This is still a far cry from monthly CGST receipts of Rs 50,325 crore budgeted for 2018-19.
The recent roll-out of the e-way bill mechanism could help the Centre to bridge the revenue gap to an extent. It is also pinning its hopes on the planned introduction of invoices-matching (a simplified comprehensive form for returns-filing was approved by a group of state finance ministers recently; the new form is expected to facilitate invoices-matching).
MS Mani, senior director at Deloitte India, said: “It appears that the GST revenues are now achieving the required buoyancy and the final figures (for March) may be even higher. Several anti-evasion measures such as the extension of the e-way bill to many states even for intrastate transactions during April could propel the revenues further during the current fiscal.”The CGST target for FY18 (July-February) was Rs 2,21,400 crore, or Rs 27,675 crore a month. The actual collections were a bit lower but the Centre could still meet its overall tax collection target for the year.