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Despite better compliance, December GST collections slide to Rs 94,726-crore

Jan 02, 2019

Goods and Services Tax (GST) collections continued to slide downwards for the second straight month, falling to Rs 94,726 crore in December (for November), data released by Finance Ministry on Tuesday showed.

The compliance rate, however, improved with 72.44 lakh businesses filing the summary GSTR-3B returns in December as against 69.6 lakh businesses filing GST returns in the previous month.

Cumulatively, the government has collected Rs 8,71,043 crore as GST revenue in April-December, the first nine months of this financial year. With Rs 8.71 lakh crore collected so far and only a quarter remaining in this financial year, the government is still short of the overall target by Rs 4.77 lakh crore, giving rise to concerns about meeting Budget targets. Government finances are already under strain, with government’s fiscal deficit for April-November period rising to Rs 7.17 lakh crore or 114.8 per cent of the full-year target of Rs 6.24 lakh crore.

In the Budget for 2018-19, GST collections, including compensation cess, have been pegged at Rs 7.44 lakh crore, out of which the Centre aims to collect Central GST (CGST) of Rs 6.04 lakh crore and Integrated GST (IGST) of Rs 50,000 crore. In theory, IGST is supposed to be equally divided between Centre and the states. Adding State GST (SGST) collections equivalent to CGST would mean the total GST collections have been pegged at Rs 13.48 lakh crore, implying a monthly target of Rs 1.12 lakh crore. GST collections are expected to slip further after the recent round of rate cuts on 23 goods and services announced in the 31st GST Council meeting held on December 22 and became effective from January 1.

The revenue cost of the latest rate cuts is estimated to be Rs 5,500 crore a year and Rs 1,375 crore in the January-March quarter. Out of the total Rs 94,726 crore collected, central GST (CGST) collection is Rs 16,442 crore, state GST (SGST) is Rs 22,459 crore, integrated GST (IGST) is Rs 47,936 crore (including Rs 23,635 crore collected on imports) and cess is Rs 7,888 crore (including Rs 838 crore collected on imports).

Tax experts said this dip in collections will make the Council rethink on the rate cut for cement and auto parts. Abhishek Jain, Tax Partner, EY, said, “The slight dip in GST revenue collections as compared to the last two months is a bit discouraging. This may deter the government from rationalising the rate of goods left in the 28 per cent category like cement, auto parts, etc in the short term”.

Also, the Centre has waived late fees for non-filers of summary and final sales returns for the July 2017-September 2018 period by businesses registered under GST.

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