The average monthly collection under Goods and Services Tax (GST) in the eight months till March 2018 amounted to Rs 89,885 crore. "During the year 2017-18, total revenue collections under GST in the period between August 2017 and March 2018 have been Rs 7.19-lakh crore. Including the collection of July, 2017, the total GST collections during the 2017-18 stands provisionally at Rs. 7.41 lakh crore," Finance Ministry tweeted this morning.
"This includes Rs 1.19-lakh crore of CGST, Rs 1.72-lakh crore of SGST, and Rs 3.66-lakh crore of IGST (including Rs 1.73 lakh crore on imports) and Rs 62,021 crore of cess (including Rs 5,702 crore on imports)," the Ministry further said.
After a strong collection in the initial couple of months post the new tax regime's July 1 roll-out last year, the GST collections have dipped monthly far more often than they went up. For instance, from Rs 95,000 crore for July 2017, the mop up slipped to Rs 90,669 crore the following month. It rallied to Rs 92,000 crore in September, but steadily dipped for the next two months, hitting a low of Rs 80,808 crore in November. It shot up 7 per cent in December but again dipped slightly for the next two months straight. GST collections for February stood at over Rs 85,000 crore, but only 69 per cent of the total taxpayers filed returns.
That is the main problem. Despite all earlier claims of the government that GST would force taxpayers to be more compliant, the number of returns filed in the 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 1 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.
Recent media reports suggest that the March mop up has been exceptional, bucking the lacklustre trend so far. The 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 told The Financial Express. Analysts say that the collections could even 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. In fact, 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.
"Total compensation released to the states for eight months during 2017-18 was Rs 41,147 crore to ensure that the revenue of the states is protected at the level of 14 per cent over the base year tax collection in 2015-16," said another FinMin tweet. It added that the revenue gap of each state has coming down in the period under review and that the Average Revenue Gap of all the states for the last year is around 17 per cent.
In the current fiscal, which began this month, the government is shifting to a cash basis of accounting where revenues accrued at the completion of a month would be taken on record. Accordingly the GST collection for April is likely to be released on May 1.
Moreover, the Centre has a surplus of Rs 20,000 crore in the GST cess fund by March 31. The excess comes from Rs 62,021 crore collected as cess on sin and luxury goods during FY18. This amount will now make up for the compensation fund used to cover any revenue shortfall faced by states on implementation of GST. For 2018-19, the government has budgeted to collect Rs 61,331 crore as GST compensation cess.
"There is over Rs 20,000 crore surplus in the cess fund. It will be utilised for compensating the states. So far compensation has been released till February. Compensation for March and April will be released in May," PTI quoted a Ministry official.
Under the GST, states were compensated once in every two months for any revenue loss suffered on account of GST. The revenue gap of each state has reportedly been declining over the course of last eight months. The average revenue gap of all states for last year is around 17 per cent, the finance ministry said in a statement.
(With PTI inputs)