GST collections fall for second straight month in February to Rs 85,174 crore

GST collections fell for the second straight month in February to Rs 85,174 crore as only 69 per cent of the taxpayers filed returns. The lower-than-expected Goods and Service Tax revenue comes at a time when the government is finding it difficult to meet GST collection targets due to higher-than-expected input credit and refund claims.
 
Around 59.51 lakh GSTR 3B returns were filed for the month of February till March 25. This is 69 per cent of total taxpayers who are required to file monthly returns, the finance ministry said in a statement.

The second consecutive decline in the GST collections comes after the tax collections for January recorded a marginal drop. GST collections had registered an increase in December 2017 after declining in the two previous months of November and October following the decision of the GST Council to cut rates on more than 200 items.

Out of Rs 85,174 crore GST collections, Rs 14,945 crore was collected as CGST, Rs 20,456 crore was collected as SGST; Rs 42,456 crores was collected as IGST and Rs 7,317 crores was collected as compensation cess.

Despite all earlier claims of the government that the Goods and Services Tax (GST) would force taxpayers to be more compliant, the number of returns filed in the first seven months since its launch belies this claim.

The number of returns filed each month has not crossed 70 lakh though the number of tax payers registered with the GSTN has crossed one crore (64 lakh earlier indirect taxpayers who migrated to GST and 38 lakh new registrants). Out of over one crore registered taxpayers, around 18 lakh are under composition scheme, who have to file quarterly returns.

However, the CBEC chairperson Vanaja Sarna has said that collection of Goods and Services Tax (GST) will see buoyancy from April onwards and will cross Rs 90,000 crore per month. "Enforcement action will take place and you will get more people on board," Sarna had said.

The government is taking a closer look at input credit claims of taxpayers, especially those of transition credits. Earlier this month, the Central Board of Excise and Customs (CBEC) had issued a guidance note on verification of transition credit claims.

As per the note, it seems the government is putting under scanner the claims of taxpayers who have availed of transitional credit greater than Rs 25 lakh and where the closing balance of CENVAT credit during the period between October 1, 2016, and June 30, 2017, had grown by 25 per cent.

According to the note, a list of top 50,000 GSTINs has been drawn for checking the order of transitional credit availed. Entry-by-entry data in TRAN-1 would be verified by tax officers. TRAN-1 is the return form filed to claim input credit on taxes paid before the GST came into being.

The credit verification would be done by the Central GST authorities even if the state has the jurisdiction. The note issued by the CBEC says that the department would try verify claimed credit on the basis of data already available with the department without contacting the taxpayer.