Revenue from Goods and Services Tax (GST) has dipped to three-month low in December. This can impact Centre’s determination to keep the fiscal deficit to the budgeted level of 3.3 per cent (of GDP) during current fiscal.
According to a Finance Ministry statement, the total gross GST revenue collected in December is ₹94,726 crore. This comprises CGST (Central Goods and Services Tax) amounting to ₹16,442 crore while collection from SGST (State GST) was ₹22,459 crore and from IGST (Integrated GST) was ₹47,936 crore (including ₹23,635 crore collected on imports), beside cess of ₹7,888 crore. The total number of GSTR 3B Returns filed for November, up to December 31, is 72.44 lakh.
The government initially aimed to collect by December 31, ₹1-1.04 lakh crore from GST every month. However, barring April and October, the collection has always been below ₹1 lakh crore. The lowest collection was ₹93,960 crore in August while the highest was ₹1.03 lakh crore in April.
The December number average for current fiscal is over ₹96,000 crore, which is higher than ₹89,885 crore of the last fiscal. Still, it would be challenging for the government to meet the fiscal deficit target, which has already exceeded the Budget Estimate in just 8 months.
Lower auto sales
One of the reasons for lower collection could be lower automobile sales. In fact, the nation’s largest car maker Maruti reported sales of passenger cars down by 1.2 per cent in November and nearly 5 per cent in December.
The government has settled ₹18,409 crore to CGST and ₹14,793 crore to SGST from IGST as regular settlement. Further, ₹18,000 crore has been settled from the balance IGST available with the Centre on provisional basis in the ratio of 50:50 between Centre and States.
The total revenue earned by Central government and the State governments after regular settlement in December, 2018 is ₹43,851 crore for CGST and ₹46,252 crore for the SGST.
According to MS Mani, Partner at Deloitte India, said the collections seem to indicate that the revenues are stabilising around ₹95,000 crore per month, despite the rate reductions in the current fiscal. “The revenues being lower than the targets could lead to more compliance pressures on businesses and more focus on anti evasion measures,” he said.
Pratik Jain, Partner & Leader (Indirect Tax) at PwC India, said that while the December collections are lesser than November and October (where it exceeded ₹1 lakh crore), overall average collection for 2018-19 has shown marked improvement over 2017-18. This, coupled with decent growth in income tax collections, gives a clear indication that tax base is expanding.