June GST collection near Rs 1 lakh crore mark but centre’s collection falls 20% short of target

Helped by the e-way bill and gradual improvement in compliance, the goods and services tax (GST) collections are rising, albeit gradually. However, these aren’t still keeping pace with the Centre’s budget targets.

The GST collection for June came in at Rs 96,483 crore, a trifle more than the same for May, taking the monthly average for the current fiscal (April-June) to over Rs 95,000 crore, compared with Rs 90,000 crore last fiscal (July-March).

The June collections consist of Rs 15,877 crore as central GST, Rs 22,293 crore as state GST and Rs 49,951 crore as integrated GST — including Rs 24,852 crore collected on imports. Additionally, collection from cess came in at Rs 8,362 crore, the government said in a statement.

Also, the compliance rate for June showed marginal improvement as 66 lakh eligible taxpayers filed the summary returns by the deadline compared with 64.7 lakh in the previous month.

Separately, the government said Rs 3,899 crore has been released to the states as GST compensation for the months of April and May.

Despite the gradual growth month over month, the revenue collection is well below the budgetary target.

While June’s CGST collection would amount to Rs 40,852 crore if half the IGST is added, the monthly budgetary target for the Centre is `50,325 crore. This represents a shortfall of nearly 19%. IGST is levied on goods moving across state borders and is eventually split equally between state and the Centre once the items reach the final consumer.

“The trend of a marginal increase in the GST tax collections continues during July and there would be some concerns on when a stable `1 lakh crore plus target would be achieved and the steps required to be taken to prevent fiscal slippages,” said MS Mani, partner, Deloitte India.

The GST mop-up could further be impacted by an estimated `1,000 crore next month owing to rate cuts on 88 items that came into force last Friday. However, the GST Council had said that lower rates would spur consumption and lead to further buoyancy.

Vishal Raheja, DGM, GST, Taxmann, said: “Certainly GST revenue collections are improving from last three months after implementation of e-way bill which is a major tool under GST to curb tax evasion. However the government is still short of the average monthly target of revenue fixed in Budget of 2018-19. The rate cuts on recommendation of the GST Council in the last meeting will impact collection in short run but demand will increase due to lower prices and it will boost collection in long run.”

Source - FE 

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