The economic slowdown has now affected the country’s gross Goods and Services Tax (GST) collection in August 2019 that slipped below the Rs 1 lakh crore mark at Rs 98,202 crore from over Rs 1.02 lakh crore in the previous month, according to the finance ministry. With manufacturing sector going down and the government considering cutting down the GST rate over auto components, the tax collection is likely to go down in future, according to sources.
“The slowdown, if it continues beyond this quarter, will have a negative impact on businesses. Given the current scenario, it is difficult to achieve even the revised revenue target,” a senior finance ministry official told this publication.
The Central government has already significantly lowered its projection for GST collections in the Union Budget for 2019-20 against the interim Budget presented in February this year. The Centre was expected to collect Rs 6.63 trillion, down 13 per cent against previous estimate of Rs 7.6 lakh crore, now even this target seems to be difficult to achieve.
“The gross GST revenue in the month of August, 2019 is Rs 98,202 crore of which CGST is Rs 17,773 crore, SGST is Rs 24,239 crore, IGST is Rs 48,958 crore (including Rs 24,818 crore collected on imports) and cess is Rs 7,273 crore (including Rs 841 crore collected on imports),” said a finance ministry statement.
A total of Rs 27,955 crore was released to states as GST compensation for the month of June-July 2019, it added.
The collection was not high even when the number of GST returns filed was higher than last months. The total number of summary returns in GSTR 3B forms filed up to 31 August was 75.8 lakh against a total of 72.45 lakh GSTR-3B returns filed in May.
However, experts are pinning their hope on festive season, which is expected to boost the consumption slowdown in the country.
Amit Kumar Sarkar, managing partner, Versari Advisors India LLP said people are concerned about the government meeting the budget target for GST collections. Though, the revenue mop-up remains challenging for the government, Sarkar sees an upward trend in GST collection in coming months.
“With the start of festive season in the month of October consumption peaks up and hence collection would be higher. It has to be seen as to how October-December period pans out,” he added.
Though, the transfer of money from the Reserve Bank of India is expected to relieve the government from fiscal strain for the time being. If the slowdown continues and GST collection fails to improve, this will make it difficult for the government to meet revenue target.