GST collection dropped to Rs 94,726 crore in December 2018 as compared to November’s collection of Rs 97,637 crore.
But the Good news is regarding the most important factor and that is Compliance, which improved during the month as the total number of sales returns or GSTR-3B filed in December stood at 72.44 lakh as compared to November’s 69.6 lakh.
The finance ministry in a statement said that the segregated amount is Rs 94,726 crore, while individually, the Central GST (CGST) collection was Rs 16,442 crore, State GST (SGST) was Rs 22,459 crore, Integrated GST (IGST) was Rs 47,936 crore and Cess was Rs 7,888 crore.
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Through a regular settlement, the government has settled Rs 18,409 crore to CGST and Rs 14,793 crore to SGST from IGST.
The ministry informed that the total revenue earned by the central government and state governments after regular settlement in December was Rs 43,851 crore for CGST and Rs 46,252 crore for SGST.
The system function is such that, the December revenue collections reflect the purchase and sales activities conducted in November.
In the last nine months i.e. from April to December of the current fiscal, the government has extracted over Rs 8.71 lakh crore from Goods and Services Tax (GST). The 2018-19 budget reflects estimated annual GST collection at Rs 13.48 lakh crore, which amounts to a monthly target of Rs 1.12 lakh crore.
The monthly average of GST collection in the last fiscal (July 2017 – March 2018) has been Rs 89,885 crore.
The GST revenue is expected to experience some more pressure in the upcoming months as a result of the cut rates on 23 items effective January 1, 2019, by the GST Council. With the recent rate cuts applied, only 28 items are left in the highest tax slab of 28 percent.
Due to the rate reduction, there would be an annual revenue implication of Rs 5,500 crore which makes it obvious that in the remaining three months of the current fiscal (January-March) the revenue loss would amount to about Rs 1,375 crore.
“It appears that the GST revenues are stabilizing. During this year, we have had rates heading south, hence it would be difficult for revenue to head north immediately,” Deloitte India Partner M S Mani said.
PwC National Indirect Tax Leader Pratik Jain said that GST collections done in the next couple of months would be on a similar basis and the enforcement and investigation cases may increase.
“The government may want to have a more realistic estimate of GST collection for next year. When the new compliance framework comes in from next fiscal, the collections could improve again as there would be greater control over input credit claimed by businesses,” Jain said.
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If we look upon the Data month-wise, GST collection stood at Rs 1.03 lakh crore in April, Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August, Rs 94,442 crore in September, Rs 1,00,710 crore in October and Rs 97,637 crore in November.
EY Tax Partner Abhishek Jain said that the downfall in GST revenue collection as compared to the last two months is a bit discouraging.
“This may deter the government from rationalizing the tax rate of goods left in the 28 percent category like cement, auto parts, etc in the short term,” he added.
