Tax officials from the Centre and States will meet later this month to assess the trend in revenue collections from the Goods and Services Tax and review measures to further boost compliance.
The meeting, called by Finance Secretary Hasmukh Adhia on December 9, will also discuss measures to arrest revenue leakages and increase collections under the new indirect tax regime.
Sources said a key focus would be to encourage more mid-sized businesses to comply and pay taxes on time.
The move comes nearly five months after GST was rolled out from July 1. Tax collections are yet to stabilise with several rate changes and confusion over compliance procedures amongst tax payers which has led to relaxed returns filing schedules.
A presentation on these issues is also expected to be made before the GST Council when it meets in January. The Council has been closely tracking tax collections under the new levy.
“The tax slippages under GST have come down in recent months and we hope that over the next few months there will be more stability,” said a State official.
Bihar Deputy Chief Minister Sushil Modi had recently said the average revenue shortfall of all States eased to 17.6 per cent in October from 28.4 per cent in August.
But, with the rate cuts on 200 items, the shortfall could increase further in the coming months. States expect a revenue loss of about ₹20,000 crore annually from the rate cuts announced in the last meeting of the GST Council.
Already, GST collections in October dipped significantly to ₹83,346 crore against ₹92,000 crore in September.
Centre’s financesMore worryingly, the Centre’s share in GST between August and October amounted to ₹58,556 crore, while State GST was ₹87,238 crore for the period.
The issue is significant given that the Centre’s finances are under pressure as it tries to meet the fiscal deficit target of 3.2 per cent in 2017-18. The government has said it hopes to meet the indirect tax collection target for the fiscal.