January collections: Stagnant GST revenue ups concern for the Centre

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Tax collections for goods and services (January) fell marginally to 86,318 million rupees from 86,703 million rupees (rupees) in the previous month, contradicting government expectations that the reduction of transition credits and the expansion of the base could have higher orbit. Analysts considered that GST revenues lower than expected for the first month of 2018 could force the government to hasten the introduction of anti-evasion measures such as bill collection and reverse charging in transactions with non-registered distributors, in addition to the invoice electronics. which is scheduled to be released from April. The stagnation in collections could also lead to a tighter scrutiny of residual transition credits and a slower rate of return of tax to exporters, even though they expect a rebound of reimbursements towards the end of the financial year. The possibility of significant rate reductions at the March 10 meeting of the GST Board has also been affected, given the lack of solid evidence suggesting lower rates will drive compliance to the extent necessary to add a gradual pace to the growth of income. According to a government statement, 69% of eligible taxpayers, almost 58 lakh, had filed returns for January before February 25, a little higher than the previous month. This was even when more than 1 million companies are now registered for GST (more than 87 lakh taxpayers are required to submit their monthly returns). The total collection under central GST and state GST for January stood at Rs 25,560 crore and Rs 33,440 crore, respectively.

These figures include transfers of funds from the integrated GST to both CGST and SGST through agreements. This reflects that the CGST revenues, limited so far due to the huge transitory credit credits (around Rs 1.6 million lakh crore), have not yet accelerated. The recent Budget has estimated that the monthly CGST revenues during the current fiscal year will be Rs 27,675 million and an additional Rs. 20,238 crore reaches the central treasury as its share of the accumulated IGST, taking the total share of the GST Center (gross, before mandatory transfers to the states) to Rs 47913 crore. In contrast to this, the GST’s monthly average profit for 2018-19 is expected to be Rs 54,491 crore, an increase of 14%. Although this was not seen by many as too ambitious, the current trend in the collections retains the threat of a deficit. As for the states, given that they will be compensated for any shortfall in revenues with respect to the level of revenues that would represent an annual growth of 14% of the relevant base of 2015-16, the attenuated GST’s buoyancy is a minor threat to its income.

The government said: “In addition, 11.327 billion rupees of IGST are transferred to the CGST account and 13.479 billion rupees are transferred from IGST to SGST through the settlement of funds on account of the cross-use of the IGST credit for the payment of CGST and SGST respectively or due to interstate B2C transactions “. He added that Rs 8,331 crore was raised through the compensation process in January. Even though 17.65 lakh evaluations had been subscribed for the composition scheme until last month, more than 1 lakh of them have chosen not to be part of the scheme to be regular contributors. The GST collections decreased from a maximum of more than Rs 92,000 crore in July to around Rs 80,000 crore in November before bouncing to Rs 86,703 crore in December. Pratik Jain, indirect tax partner and leader, PwC India, said: “With the release of the e-way invoice deferred to April and a continuing deficit in the number of monthly returns that are sent, we can see the administrative adjustment and measures more rigorous against the evasion in the next months. “A more detailed analysis of the opening credit claimed by the companies can also be expected”. According to MS Mani, senior director of Deloitte India, “it is good to see that more than 1 lakh contributors have chosen to abandon the compositional scheme and become normal concessionaires: this will pave the way for an expansion of the tax base and will lead to more collections “