NEW DELHI: In a first, the government might have to recalibrate its budgetary tax collection estimate half-way after the goods and services tax (GST) comes into effect.
In Budget 2017-18, Finance Minister Arun Jaitley used the traditional tool of setting a modest growth to the expected revenue collection in the current fiscal for indirect tax projections of the next fiscal year.
By that yardstick, 2017-18 will be a different year compared with the past. Mid-way, GST will kick in by subsuming all central indirect taxes such as central excise and service taxes as also state levies like value-added tax (VAT) into one. GST collections so made are then to be split equally between the Centre and states.
However, due to non-availability of reliable estimates of combined VAT collections of states, Jaitley could not project the Centre’s revenue from GST in 2017-18.
“Right now, we have not put them under the head of GST because till the law is passed (by Parliament and state legislatures), we cannot account under GST. So, we have taken the normal estimate of excise and service tax collection.
We have taken a very modest growth rate of about nine per cent for indirect tax. Because of GST, we may have to wait and watch. So, we are being conservative in estimate,” said Revenue Secretary Hasmukh Adhia.
The GST revenue collections can be arrived once the all-powerful GST Council, headed by Jaitley, fixes tax rate for every goods and service.