Revenue Collection Losses 10,000 Crore After GST Rate Changes

The tweaks in GST tax rates affected the revenue collection of the government. The total calculated loss stands at Rs. 10,000 Crore comparing the last month collection. Finance Ministry told that the collection received till 27 November generated Rs. 83,346 Crore while the collection was of Rs. 95,131 Crore in October and Rs. 93,141 Crore in September.

This shortage in revenue collection is due to recent tweaks in GST slab. As per the report from Finance Ministry, there is 95.9 lakh taxpayers are registered under GST. Out of it, 15.1 lakh taxpayers are registered under composition scheme where they file the return on a quarterly basis instead of monthly filing. From October to 26 November, the total taxpayers who filed GST return stands at 50.1 lakh.

The union government has given Rs. 10,806 Crore to states as a compensation for July and August months. In addition, Rs. 13,695 is given for September and October months in the name of the composition. As it has been four months since GST implementation while explaining the revenue collection shortage the ministry said that initially integrated GST was charged while transferring the goods from one state to another state. Notably, the revenue collection was Rs. 95000 crore for July month, Rs. 91000 crore for August and Rs. 92150 crore for September month.

Behind the revenue collection decrease, the reduced GST rates have been the major cause. Besides this, the tax department is collecting the GST from traders on the basis of self-declaration done by them. Many provisions like electronic transit permit system e-way bill, matching of returns and repugnant duty collection have delayed for now. Apart from this, in the initial months of GST, the IGST is charged additionally. The Goods charged for IGST now refunded some portion in form of credit to traders after the selling of that Goods and this is also another reason which reduced the revenue collection.

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After GST rollout, the total filing under GSTR-3B was 58.7 lakh for July month, 58.9 lakh for August month and 50.1 lakh for October month.

In GST council meeting on 10 November, it has reduced the tax rate for 177 products from 28% to 18%. Now in 28% slab, there are only 50 items which were used to be 277 previously. Under GST, more than 1200 Goods and Services categorized in 5, 12, 18, and 28 percent tax slab rates.