GST collections show signs of stabilisation, one year on
A year after its implementation, the Goods and Services Tax has started showing signs of stabilisation with healthy collections though they are still short of government estimates. According to the estimates made in the 2018-19 union budget by the revenue department, the government expects to have a monthly average of GST collections of Rs 1.15 lakh crore.
The Goods and Services Tax (GST), which came into effect on July 1, 2017, has started showing signs of stabilisation with healthy collections though they are still short of government estimates.
The collections for June continue to remain in-line with the collections reported for May, government sources said. Until July 30, more than 55 lakh GST returns were filed for June, government officials familiar with the matter told CNBC-TV18.
The revenue collections for June, which formally gets reported in July, “is likely to range between Rs 93,000- 96,000 crore”, according to one official who did not want to be named.
The collections, however, fall short of government estimates. According to the estimates made in the 2018-19 union budget by the revenue department, the government expects to have a monthly average of GST collections of Rs 1.15 lakh crore.
Experts say it is tough to meet such a target, however. Finance secretary Hasmukh Adhia also said GST mop-up of Rs 1 lakh crore is still not a norm.
“While collection looks good, we need to analyse the quantum of the refunds which are pending before the authorities. The refunds pending will show the actual reduction which may happen in the subsequent months. The budgetary support announced have not been given to various units located in the backward zones. There could be hit in the months to come due to this outflow of refunds," said Abhishek A Rastogi, partner at Khaitan & Co.
"It's estimated that the rate cuts may lead to the reduction of GST to approximately Rs 1,000 crore per month. However, this reduction may be offset against the increased demands of these high price sensitive products," Rastogi said.
The rate cut on several goods announced on July 21 is also expected to impact collections though officials said it is likely to be visible from next month. “Collections might slip for a month or two due to the rate cut announced in the 28th GST Council meeting,” a senior official said asking not to be named.
The government is confident that the decline should not remain for long. Finance ministry officials have also indicated that “revenue is stabilising around Rs 95,000 crore per month, which is a good trend.”
“Revenue is likely to bounce back, if it declines due to rate cuts, and is likely to stabilise back to healthy levels because of increased compliance and enforcement measures,” a senior official said, requesting anonymity.
The revenue figures are formally announced by the finance ministry on the first day of every month, which comes in with a one month lag.
The GST collection for June had come in at Rs 95,610 crore and was announced on July 1. The GST collection for May were slightly better than April numbers which stood at Rs 94,016 crore.
Total GST collected for May stands above the Rs 89,885 crore figure which is the average collection for the nine months of 2017-18 till March, said Adhia.
First Published: Jul 31, 2018 5:25 PM IST
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