GST collection crosses Rs 1-trn mark for the fourth month in a row in Feb

The mop-up could have been much higher, but tax on imports fell 2 per cent year-on-year

Goods and Services Tax (GST) collection crossed the Rs 1-trillion-mark for the fourth month in a row in February at Rs 1.05 trillion. The GST collection, which grew 8.3 per cent year-on-year (y-o-y) in the month, was a tad lower than Rs 1.10 trillion mopped up in the previous month.

GST collection had grown 8.1 per cent y-o-y in January. The mop-up could have been much higher, but tax on imports fell 2 per cent y-o-y. However, experts ruled out the impact of the coronavirus outbreak in China on imports since these are contracted three months in advance. The earlier GST collection target for FY20 required January and February mop-up to be at Rs 1.15 trillion each and that for March to be at Rs 1.25 trillion. However, the Centre truncated the target for its part of the GST, compensation cess and integrated GST by Rs 51,000 crore in the revised estimates for FY20.

The collections have exceeded Rs 1-trillion-mark each month since November. However, experts said it could be due to blockage of input credits. “One will have to see how much of it is due to restriction and blockage of input credits, which has been happening in the last three months or so,” said Pratik Jain, partner PwC..

Ongoing unrest over Citizenship Act won’t derail our economic agenda: FM

‘There’s no undermining of India’s unity and its economy is important’, said the finance minister

The ongoing turmoil over the Citizenship (Amendment) Act would not impact the government’s response to economic challenges, Finance Minister Nirmala Sitharaman said on Monday, adding that the government was committed to reforms and was taking steps to revive growth. She also cautioned against “jihadist, Maoist, and separatist” elements getting into student activism.

“There’s no undermining of India’s unity and its economy is important…We can assure every step is being taken to ensure that India and the economy go forward and benefit all,” Sitharaman said at Times Network’s India Economic Conclave. “I shall be, together with the prime minister, working towards engaging with every sector and making sure their requirements are fulfilled and challenges are met,” she added. She, however, declined to say when she expected a turnaround in the economy. “I am not going to spend time saying when it (slowdown) is going to reverse. As long as anybody wants the government to intervene, we shall intervene,” she said.

India’s economy grew at 4.5 per cent in the September quarter, the slowest in six years. The government, she said, was working on reviving consumption by pushing forward rural programmes and ensuring money reaches consumers. Public investment in infrastructure was being taken seriously and the pending dues of small and medium enterprises were being cleared, she added. She acknowledged that goods and service tax collection in the first eight months of the financial year was lower than expected, and added there was no discussion in her department to revise the GST rates…

Read More: Citizenship Act Bill

GST collection over Rs 1 trillion in July despite subdued CGST and SGST

However, the central and state portions remained subdued, posing a challenge for the revenue target for the financial year

Collection from the goods and services tax (GST) was above Rs 1 trillion in July, mainly on account of higher mop-up under the integrated GST. However, the central and state portions remained subdued, posing a challenge for the revenue target for the financial year.

GST collection at Rs 1.02 trillion in the month was slightly more than 2 per cent higher than the Rs 99,939 crore in June and 5.8 per cent higher than the Rs 96,483 crore in July last year. However, Central GST collection was just Rs 17,912 crore in July, down from Rs 18,366 crore in June.

State GST collection too was lower at Rs 25,008 crore in the month against Rs 25,343 crore in June. It was the IGST that rose to Rs 50,612 crore against Rs 47,772 crore in this period. Subdued revenue collection poses challenges for Finance Minister Nirmala Sitharaman with a growth target of 16 per cent for the central GST in 2019-20, reinforcing the need for emphasis on data intelligence and policies to plug leakages.

The CGST collection target was revised downwards to Rs 5.26 trillion for the fiscal year from the Rs 6.1 trillion estimated in the Interim Budget, following a 9 per cent shortfall in collection in the previous year.

“GST collection for the month, despite being more than Rs 1 trillion, would be a matter of concern because this is lower than the Budget estimate. Collection needs to be correlated to the economic situation,” said M S Mani, senior director, Deloitte India.