Despite the teething troubles due to a transition into a new tax system, going ahead, better compliance is expected
Compliance level has got better since the implementation of the new indirect tax system from July 1, it is far from its desired level.
For instance, only 27. 2 lakh or close to 37 percent of assessees filed return in August 2017, out of 73.7 lakh eligible taxpayers, data released by the finance ministry showed. Compliance rate under Goods and Services Tax (GST) was around 50.29 percent and 56.58 percent in September and October, respectively.
Assessees increasingly started paying taxes gradually, with compliance level crossing 66 percent in December 2017, and settling at 62.63 percent in March 2018.
“As may be seen, the compliance level as on the due date has steadily increased and, by the end of the financial year, has reached to an average of 65 percent from around 55-57 percent observed during initial months. The cumulative compliance levels (percentage of returns filed till date) for initial months has crossed 90 percent and for July, 2017, has reached 96 percent.
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Frequent changes in rules related to GST, complex return filing system, poor internet connectivity, and glitches on the IT backbone GST Network (GSTN) are some of reasons for low level of compliance.
Despite the teething troubles due to a transition into a new tax system, going ahead, better compliance is expected as the government has been continually trying to ease procedures simpler for the taxpayers.
Return filing during the year| Return Period | Required to file | Till due date Returns | Till due date % | Cumulative Returns | Cumulative % |
| July '17 | 6647581 | 3834877 | 57.69% | 6388549 | 96.10% |
| Aug '17 | 7370102 | 2725183 | 36.98% | 6851732 | 92.97% |
| Sep '17 | 7823806 | 3934256 | 50.29% | 7109143 | 90.87% |
| Oct '17 | 7721075 | 4368711 | 56.58% | 6777440 | 87.78% |
| Nov '17 | 7957204 | 4913065 | 61.74% | 6765603 | 85.02% |
| Dec '17 | 8122425 | 5426278 | 66.81% | 6747887 | 83.08% |
| Jan '18 | 8322611 | 5394018 | 64.81% | 6694387 | 80.44% |
| Feb '18 | 8527127 | 5451004 | 63.93% | 6562362 | 76.96% |
| Mar '18 | 8715163 | 5458728 | 62.63% | 5630683 | 64.61% |
“In the initial period the average compliance level was 55 percent, which has now risen to 65 percent. With the GSTN system working smoothly and no hindrances for generating e-way bills the compliance level should increase further,” Parag Mehta, Partner, N.A. Shah Associates LLP said.
“With many states also introducing the intra-state generation of e-way bills for movement of good , evasion is bound to reduce and increase the revenue,” Shah said.
Revenue Collection
The finance ministry today said that total revenue collected under GST between August 2017 and March 2018 has been Rs. 7.19 lakh cr, making the average monthly collection Rs 89,885 cr.
The total revenue for the eight-month period includes Rs 1.19 lakh cr of Central GST (CGST), State GST (SGST) worth Rs 1.72 lakh cr, Rs 3.66 lakh cr of Integrated GST (IGST) and Rs 62,021 crore cess.
However, the finance ministry said that including the collection of July 2017, the total GST collection during the financial year 2017-18 stands provisionally at Rs. 7.41 lakh cr.
While the tax on domestic supplies in a month is collected after return is filed, it gets collected in the next month, IGST and cess on imports gets collected in the same month.
“Therefore, during the current year, GST on domestic supplies has been collected only in eight months from August 2017 to March 2018, IGST and cess on imports has been collected for nine months, from July 2017 to March 2018,” the finance ministry said.
Abhishek Jain, Tax Partner, EY India, said that the average monthly collection under GST for 2017-18 was around Rs 90,000 crore, implicating a deficit of approximately 24% in reference to the estimations for 2018-19.
“While the growth envisaged is quite steep, the same may still be possible with E-Way Bills being in place and introduction of other anti-evasion measures like TDS/TCS, etc," Jain said.