NEW DELHI: Worried about the slowdown and stagnant GST collection, the Prime Minister’s Office has flagged concerns over revenue collection and has asked the tax department to explain how it will achieve revenue targets.
“The slowdown will have a negative impact on revenue collection. The PMO has flagged its concern over the revenue collection targets and has asked it to explain how it will meet the targets. A meeting is likely to be held with revenue department officials in the next few days,” a senior official from the finance ministry said.
In the past, several members of the Prime Minister’s Economic Advisory Council (PMEAC) have questioned the revenue collection target amid the slowdown and had requested the PM to take stock of the situation.
Despite several measures, average GST collection remains below the psychological mark of Rs 1 lakh crore. Gross goods and services tax (GST) collection in August 2019, which was published by the finance ministry on Sunday, slipped to Rs 98,202 crore. Collection remained low despite about three lakh more GSTR 3B forms being filed in July up to August 31 at 75.8 lakh, against a total of 72.45 lakh GSTR-3B returns filed in May.
Despite the festive season coming, officials are sceptical about revenue collection due to the slowdown and a possible cut in GST rates as indicated by the finance ministry, mainly in auto components.
“The auto components are major sources of revenue. But with the slowdown, the government cannot afford to increase taxation on many items. In fact the GST is likely to be revised downward. This is not going to boost revenue collection. We see it is very difficult, if not impossible, to meet the revised revenue target,” said an official from the Department of Revenue. Finance Minister Nirmala Sitharaman has said the GST Council would take the final call on reducing the tax rate on motor vehicles.