NEW DELHI: Buoyed by year-end sales, which helped the government mop up close to Rs 1 lakh crore in Goods and Services Tax (GST) during March, collections during the first year of rollout were estimated at Rs 7.4 lakh crore.
Although the government did not disclose the March collection numbers, sources said that the overall number was the highest-ever monthly receipt. In a statement, the finance ministry said that collections between August 2017 and March 2018 were estimated at Rs 7.2 lakh crore, including Rs 1.2 lakh crore of central GST, Rs 1.7 lakh crore of state GST, Rs 3.6 lakh crore of integrated GST (which included Rs 1.7 lakh crore from imports). The rest came through compensation cess levied on luxury and sin goods such as high-end vehicles, tobacco and soft drinks.
Including the collections in July, the overall figure added up to Rs 7.4 lakh crore. This translated into monthly collections of a shade under Rs 90,000 crore amid signs that the Centre and states will help realise more funds in the coming months as the new regime was showing signs of settling down and the government’s moves to check leakage of funds was picking pace.
Abhishek Jain, partner at EY India, said that the monthly collection data pointed to a deficit of around 24% of the estimates for financial year 2018-19. “While the deficit is apparently perturbing, it is expected to be reduced with e-way bills being in place and possible introduction of other antievasion measures like TDS/ TCS, credit matching etc,” he added.
Although compliance was seen to be a problem, with the blame being put on the returns, the proportion of registered taxpayers filing returns too seems to have stabilised.
While the Centre did have to compensate some of the states for revenue loss after the new regime kicked in from July, it was left with over Rs 20,000 crore surplus in the fund where the compensation cess levied on sin and luxury goods such as tobacco and high-end vehicle flowed in. Against a mop-up of Rs 62,000 crore through the cess, compensation paid till February was estimated at a little over Rs 41,000 crore.
The March numbers have already raised demands for rationalisation of rates. “Collection for March is likely to exceed Rs 1 lakh crore. Also, after introduction of e-way bill from April 1, one could expect the revenue buoyancy to continue. With this, government might want to consider further rate rationalization, particularly reducing the 28% items to 18%,” said Pratik Jain, partner and leader for indirect tax practice at consulting firm PwC India.