Goods and services tax (GST) collections in December (concerning November transactions) came in at Rs 1,03,184 crore, closer to the mop-up in the previous month and up 9% over the year-ago month. This has indicated an improvement from the September-October period, when the collections were substantially below the Rs 1-lakh-crore mark and even lower than in the year-ago period.
The collections still are below the run rate required for the Centre to fully compensate the states for their ‘revenue shortfall’ and meet its own overall GST budget.
The government had said in the light of the April-November GST data that it could face a shortfall of Rs 63,000 crore in the compensation kitty which is created out of assorted cess revenue. It has also set a gross GST collection target of Rs 1.1 lakh crore/month for the December-March period (four months), besides a target of Rs 1.25 lakh crore for one of these months. If this goal is to be achieved, the average monthly collections for January-March period would require to be Rs 1.17 lakh crore, which appears to be a tall order. While the improvement in collections since November is comforting, the fact that GST revenues from domestic transactions grew an impressive 16% in December signal a moderate pick-up in consumption. Sources said recent curbs on utilisation of input tax credit (ITC) have also boosted collections.
“With the trend of improving collections and the e-invoicing and new returns slated in the coming months, it is now expected that the GST collections would show a steady improvement, although it may still fall short of the annual targets,” said MS Mani, partner at Deloitte India.
The collections, however, continue to suffer from the negative growth of integrated GST on imports, which in December declined 10% from year-ago period. The government said that after regular settlement of IGST, total revenue earned by the Central government and the state governments stood at Rs 41,776 crore and Rs 42,158 crore, respectively, in December. The total number of GSTR 3B returns (monthly summary) filed for the month of November was 81.21 lakh, compared with 78 lakh filed in the previous month, suggesting an improvement in compliance. The collections from cesses (for compensation to state) in December was Rs 8,331 crore (if one goes by the Centre’s Budget target, the compensation revenue/month should be Rs 9,083 crore).
Several states have complained of delays in the release of compensation amounts to them. Recently, the Centre released Rs 35,227 crore to states as compensation for the August-September period.
Officials said that the revenue leakages due to circular trading and fake invoices was being curbed more efficiently in recent months. Further, a restriction on availing input tax credit by applicants whose suppliers don’t upload invoices is also aiding collections.
Source: Financial Express
