GST revenue collections in April ended with a nice round number of Rs 1.03 lakh crore for the first time since its rollout last July. That, dear reader, looks like icing on the cake considering the monthly average GST revenue of Rs 89,885 crore.
But what Tuesday’s big numerical reveal doesn’t tell you is, the risk of fiscal deficit target running off the rails hinges on the GST bounty, which continues to be toppy. Tax compliance at 70 per cent is heartening, but by the Centre’s own admission, April figures shouldn’t be considered as a trend for coming months, as it includes arrears and year-end tax outgo.
GST started with 18 rules and the ink was barely dry when the bevy of notifications with rules and amendments followed. Till date, 95 notifications were issued under the CGST Act alone, while a staggering 183 rate-related changes followed under the UTGST, IGST, SGST and GST Compensation Law.
Apart from this, 41 circulars and 13 orders too were rolled out—simply reflecting the complexity and chaos GST has unleashed. Despite subsuming 17 central and state taxes and 13 cesses, revenue generation is counterbalanced by additional customs and excise duties as cash cows like alcohol and petroleum are out of its ambit. Theoretically, there are four tax slabs, yet exceptions are aplenty, like precious stones and metals taxed between 0.25 and 3 per cent tax.
Nearly a year after the rollout, GST suffers from implementation issues including return filing and reconciliations. Expectations are high from the 27th GST Council meet this Friday to simplify input tax credit claiming process, and introduction of a single return for inward and outward supplies. Over 17 states introduced the E-way bill, but there’s heterogeneity in exemptions.
Topping it all, inclusion of real estate, clarity on anti-profiteering norms, and linkage of direct and indirect taxpayers is crucial. Tax buoyancy and improved compliance are positive, but without further amendments, what happens from hereon is a roll of the dice.
