GST collections for January may hit record Rs 1.15 lakh crore

Categories: GST Recent News, News
No Comments

Goods and Services Tax (GST) collection may hit a record Rs 1.15 lakh crore in January, while the shortfall in gross direct tax collections may be only Rs 11,000 crore in the first 10 months of the current financial year as compared to same period last year, two government officials familiar with the matter said on condition of anonymity. Both direct and indirect tax collections are on track despite a slowdown in the economy, mainly because of efficient tax administration, albeit minus any overreach, they added.

The overall impact of these numbers will have to be seen; the finance ministry budgeted an ambitious 25% growth in net tax revenue to Rs 16.5 lakh crore in 2019-2020. It managed to collect less than half of that in the first eight months of the year. To be sure, tax collections, especially income tax, are usually back-ended in January, February, and March. India’s gross domestic product (GDP) grew at 4.5% in the second quarter of current financial year, the lowest since March 2013. According to the government’s first advanced estimates, India’s GDP is expected to grow at 5% in 2019-20, the lowest since 2008-09.

“The GST collection in January is as per the revised target of Rs 1.15 lakh crore. It is achievable as we have been able to plug revenue leakages worth about Rs 40,000 crore by using technology and data analytics,” one of the two officials said. The highest GST collection in a single month so far was Rs 1.13 lakh crore in April 2019. Last month, the collection was Rs 1.03 lakh crore. Earlier this month, at a high-level meeting, the Department of Revenue raised the GST collection target to Rs 1.15 lakh crore for January and February 2020, and Rs 1.25 lakh crore for March 2020, the last month of the current financial year “with specific focus on stopping fraudulent input tax credit (ITC) claims”, said the second official.

The government’s earlier target was that GST collections should average Rs 1 lakh crore per month, but the bar was raised after GST revenue slumped below Rs 1 lakh crore for three consecutive months of August, September and October 2019. The indirect tax collection, which is a tax on consumption, bounced back to the Rs 1 lakh mark in November and December.The direct tax collection this year is also going to be “proportionately better” than the previous year despite the economic slowdown, a Rs 1.45 lakh crore corporate tax relief, and income tax refunds to the tune of Rs 1.7 lakh crore as on date, the second official said.

“The shortfall in the direct tax gross collection vis-a-vis the last year is of around Rs 11,000 crore on year-on-year basis, a meagre 1.2%,” the official said. The gross direct tax collection for first 10 months of the current financial year is expected at Rs 9.01 lakh crore compared to Rs 9.12 lakh crore in the same period previous year, he added. The official said that the income tax refunds were higher this year compared to the same period previous year (Rs 1.39 lakh crore) because of increased use of technology, making the processing of refunds quick and easy.

Read More at: