The collection of GST (Goods and Services) was the highest in the month of April till now but this sudden increase in the GST revenue is far from the sight of becoming the permanent norm.
In April 2019, the GST revenue increased by 10 per cent i.e. INR 1.13 trillion ($16 billion) as compared to April 2018 as per the official data. But Mr Narendra Modi, Prime Minister of India set a monthly target of INR 1.15 trillion which is still far to touch.
Suvodeep Rakshit and Upasna Bhardwaj at Kotak Mahindra Bank wrote in a note “If GST collections do not improve further and sustain, the pressure on the central government’s fiscal position will continue”. It will be difficult to achieve the target of 24 per cent growth in the FY ending on 31st March.
This is the second year in which India is facing financial crunch and on the other hand, Modi is standing for the second time in the election for which he is giving benefits such as cash for farmers and tax deductions for the middle class to bring the voters on his side.
Ashray Ohri, an economist with ICICI Bank Ltd said that the government have to take strict actions against the GST evasion and to encourage the compliance of direct and indirect taxes to reduce the financial stress.
Read Also: GST Intelligence May Soon Start Electronic Surveillance
The government has considered the GST as a tool which is used to increase the tax compliance and this was said when it was rolled out in July 2017. In the new tax, the collection has crossed the mark of INR 1 trillion in three of the first four months in 2019, which indicates profit.
Arvind Virmani, a former chief economic adviser in the finance ministry and chairman of the Foundation For Economic Growth & Welfare said “The jump in collections was expected to happen after the transition period of adjustment is over. One data point doesn’t, however, make a new trend.”
