The government collected the highest Goods and Service Tax (GST) in March, 2019. GST collections in March stood at Rs 1.06 lakh crore.
It was the fourth month in the whole year when the GST collection crossed 1 lakh crore rupees. For the fiscal year 2018-19, the government had set a target of GST recovery of Rs 1 lakh crore every month.
According to the finance ministry, the monthly GST revenue in the financial year 2018-19 was 981 billion rupees, which is 9.2 per cent more than the financial year 2017-18. This indicates that in recent months, revenue growth has been increased. In March, the total GST collection was 16 per cent higher than the same period of last year, with central GST of Rs 203 billion, SGST Rs 275 billion and IGST Rs 504 billion rupees. Apart from this, the Central Government has received Rs 82 billion in the cess item. According to experts, there are many reasons for the increase in GST collection like the ease of business, reduced tax evasion, continuous GST payments by the traders etc.
Every year, GST revenue is estimated to increase by 14 per cent in the states. However, if there is no expected increase in it, it is usually offset from the cess item. The government has amended the Compensation Act in few months back, on which basis the 50 percent of the unpaid compensation cess item can be transferred to the center at any time till the end of the five-year period.
With a significant increase in revenue, the target of 3.4 per cent of fiscal deficit can be achieved. GST collection figures are encouraging. The government has set a target of Rs 6.1 lakh crore CGST collections in the financial year 2019-20, which is 21 per cent more than the revised target of FY 2019. For this, the government will have to adopt the ways to increase tax base and will also have to prevent tax evasion, as the possibility of tax increase is now limited. According to Devendra Kumar, Chief Economist, India Ratings and Research, this goal can be achieved.
It is notable that in the matter of GST collection, April, 2019 has been the second consecutive month when tax collection is more than one lakh crore. Earlier, in the month of March 2019 too, the GST collection was Rs 1.06 lakh crore.
GST revenues were Rs 1,13,865 crore in April, 2019, in which the central GST collection was Rs 21,163 crore, state GST (SGST) was Rs 28,801 crore, unified GST was Rs 54,733 crore and cess collection was Rs 9,168 crore. Apart from this, settlement between the Center and the states was settled at 50:50 ratio of IGST of Rs 12,000 crore. After settling on regular and temporary basis, the Central and State Governments received CGST revenue of Rs 47,533 crore in April, 2019, whereas the SGST revenue was Rs 50,776 crore.
In the financial year 2019-20, the government has estimated to raise 6.10 lakh crore from CGST and Rs 1.01 lakh crore from the compensation cess. IGST is estimated to be worth Rs 50,000 crore. In the financial year 2018-19, the CGST collection was Rs 4.25 lakh crore rupees and the compensation cess of Rs 97,000 crore.
Last month, the average monthly GST collection of goods and services tax collections for fiscal year 2018-19 was 16.05 per cent higher than Rs 98,114 crore. The huge increase in the tax collection was due to many reasons; one of the main reasons was to strengthen the compliance. E-way bills, changes in taxation for the real estate sector, and increasing the tax collection by the government before the general election expenditure has increased tax collection. One reason for this increase is also the adjustment to be done at the end of the year.
It is being said that if this trend goes on in context of tax collection then the target of tax receipts kept for the financial year 2019-20 can be achieved without any extra measures.
About the author: Satish Singh is currently working as Chief Manager in State Bank of India's Economic Research Department, Corporate Centre, Mumbai, and has been writing mainly on financial and banking topics for the last 10 years.
Published On : 12-05-2019
Source : Merinews
