NEW DELHI — The central government estimates a shortfall of around 500 bln rupees in the overall goods and services tax collections for the current financial year ending March as monthly mop-up continues to be below the required run rate, a senior government official said.

The total GST collection has been 5.14 trln rupees in Apr-Aug, the first five months of 2019-20 (Apr-Mar), at a monthly average of 1.03 trln rupees.

Given that the government needs to collect an average 1.17 trln rupees per month, the current shortfall is about 140 bln rupees per month. To meet the overall GST collections, the total collections will have to rise to an average of 1.27 trln rupees per month.

The central government has projected its GST revenue in 2019-20 at 6.633 trln rupees, up 13.6% from the 5.840 trln rupees collected in 2018-19. 

According to data from the Controller General of Accounts, the Centre's collection of GST in Apr-Jul was 2.10 trln rupees, up 11.7% on year. The government's total GST collections in August declined to 982 bln rupees, the lowest in six months, bringing down the growth in the first five months to 6.4% on year.

The shortfall in collections could rise sharply if the government announces any reduction in GST rates for automobiles in a bid to revive the sector.

Automobile sales in the country have been going through the worst slowdown in decades with the domestic sales contracting on year for the last nine months. Finance Minister Nirmala Sitharaman had earlier said the GST Council will consider reduction in GST rates for automobiles. The GST Council is due to meet on Sep 20.

The lower overall tax collections could mean a double whammy for the central government as it has guaranteed a 14% growth in GST collections of states in the first five years.

Published On : 09-09-2019

Source : Cogencis