NEW DELHI: After breaching the ₹1 trillion mark in goods and services tax (GST) collections for two consecutive months, indirect tax mop-up in June fell marginally to ₹99,936 crore.
However, the average monthly collection for the April-June quarter stood at ₹1.04 trillion, up by 7% from the corresponding period of last year.
The sluggish momentum in tax collection growth is partly due to the cuts in tax rates, following the GST Council’s decision to moderate rates wherever it found a compelling case. The shortfall from the target could increase the central government’s liability to compensate states on the notional revenue loss under the GST regime—a constitutional commitment agreed upon prior to the indirect tax reform.
The sluggish pace of revenue growth also leaves very little room for the GST Council to cut tax rates in the near future unless revenue collection sees a surge. It also implies that the authorities will now focus on improving compliance by taxpayers using data collected from various sources. Central and state authorities had set a two-year transition period till 30 June 2019 for GST to stabilize.
Abhishek Jain, tax partner, EY India, said while sustenance of steady GST collection is applaudable, with the government’s focus on curbing tax evasion, tax collections could further increase. “Measures such as implementation of new return formats, upgradation of the e-way bill system, launching e-invoicing, etc., should help check tax evasion," he added.
Speaking on the second anniversary of the GST roll-out, minister of state for finance Anurag Thakur warned businesses against generating fake invoices to evade GST. “The menace of fake invoices needs to be checked as the actions of a few unscrupulous traders make the majority of honest taxpayers uncompetitive and cause loss to government revenue." He added that tax officers will take strict action in all such cases.
GST was launched in a grand ceremony held in the Central Hall of Parliament on the intervening night of 30 June and 1 July 2017.
Earlier in the day, finance minister Nirmala Sitharaman and her predecessor Arun Jaitley took to social media, looking back on the implementation process and promising greater simplification of the federal tax system.
“Today, we mark the second anniversary of the #GST. We are committed to greater simplification of the process. Thanking the @GST_Council, all state governments, union territories, trade and industries for their continued support," Sitharaman said on Twitter.
In a lengthy Facebook post, Jaitley said after the introduction of GST, the assessee base in the last two years has increased by 84%. “The number of assessees covered by the GST were around 65 lakh. Today, they are at 1.20 crores."
Jaitley said 20 states are independently showing more than 14% increase in their revenues, and the compensation fund in their case is not necessary after the first five years, wherein their revenues are protected under law.
Denouncing the critics who argued for a single-slab GST, Jaitley said they must realise that it is possible only in extremely affluent countries, where there are no poor people. “It would be inequitable to apply a single rate in countries where there are a large number of people below the poverty line."
Published On : 01-07-2019
Source : Live Mint
