The GST mop-up fell below the Rs 1-trillion-mark for the first time in four months in June. According to data released by the Ministry of Finance, it grew by 4.5 per cent to Rs 99,939 crore, against the 6 per cent growth in May. The target in the interim Budget, along with projected growth in state GST (SGST), required collections to touch Rs 1.3 trillion a month. With this shortfall, the target might become daunting if it is retained in the full Budget for fiscal year 2019-20 (FY20), to be presented in Parliament this Friday.
The GST revenue was Rs 1.06 trillion for March, Rs 1.13 trillion for April and it touched Rs 1 trillion in May. This reinforces the need for data intelligence and policies to plug revenue leakages.Revenue collections are a major challenge for Finance Minister Nirmala Sitharaman. In the interim Budget FY19-20, the growth target for the central GST (CGST) was 33 per cent.The CGST collection fell 9 per cent short of the revised target at Rs 4.5 trillion, against the Revised Estimate of Rs 5 trillion for 2018-19.Experts are of the opinion that the government might take some steps to boost revenue collections.
According to government data, the CGST revenue in June 2019 stood at Rs 18,366 crore, the SGST at Rs 25,343 crore, and integrated GST (IGST) at Rs 47,772 crore (including Rs 21,980 crore collected on imports) and cess collection was Rs 8,457 crore (including Rs 876 crore collected on imports.
The total CGST collections in the first three months even after IGST distribution stood at around Rs 1.2 trillion. Over Rs 1.5 trillion that was required to meet the target of Rs 6.1 trillion in FY20.
The government is working on measures to plug tax evasion, including data analysis, new return formats, the e-way bill system, a proposed e-invoicing system, mandatory e-ticketing for movie theatres among others. With fall in collections, the possibility of a cut in the GST is unlikely especially for those items which are in the 28 per cent slab. In the last GST Council meeting, a tax cut was considered for only electric vehicles. The proposal to reduce levy from 12 per cent to 5 per cent was moved to the fitment committee for consideration.
