Why in news?
Collections from the Goods and Services Tax crossed the Rs. 1 lakh crore mark in April, 2018.
What is the tax collection picture?
- Revenue from the GST has crossed the Rs.1 lakh crore threshold in April.
- This is the highest recorded in a single month, since the GST implementation in July 2017.
- The total Gross GST revenue collected is around Rs. 1,03,000 crore.
- Of this, CGST is around Rs. 18,000 crore and SGST is around Rs. 25,000 crore.
- IGST collected is nearly Rs. 50,000 crore, including close to Rs.21,000 crore on imports.
- Cess collected is nearly Rs. 8,500 crore, including roughly Rs. 700 crore on imports.
What is the significance?
- The average monthly collection has gone from around Rs. 89,000 crore in the first 8 months to over Rs. 91,300 crore.
- This is only by virtue of the April inflows.
- This is significant because the government’s own limit was Rs. 91,000 crore a month.
- This was the amount projected to ensure that revenues lost by the Centre and the States under the earlier indirect tax system are covered.
What does it imply?
- The GST revenue collections in April show a phenomenal buoyancy as compared to previous months.
- It is seen as an indication of the increased economic activity in the country.
- It also implies a stabilising trend with the tax collections.
- It suggests the indirect tax regime is overcoming the initial problems.
- This would be complemented by e-way bill and improved GST compliance.
- All these are expected to make a positive trend in the GST collections.
What is the need for caution?
- Trend - Usually in the last month of the financial year, people try to pay arrears of some of the previous months also.
- So, April month’s revenue cannot be taken as trend for the future.
- However, even delayed compliance is a welcome ‘new normal’.
- Compliance - Tax compliance also still remains a problem.
- Out of around 87 lakh who were eligible to file GSTR 3B returns, only around 60 lakh had actually filed.
- Evidently, the compliance rate is just 69.5%.
- Also, out of around 19 lakh composition dealers, only around 11 lakh have filed their quarterly, which is just around 59%.
- The total tax paid by composition dealers is only Rs. 579 crores, which is very low.
What lies ahead?
- It is now essential to allow the reform to stabilise for increased tax compliance.
- Making constant changes would disturb this development.
- The government has to investigate in detail the low filing of returns from the composition dealers and address it.
- In its next meet, the GST Council is expected to unveil a new and simplified return filing format.
- This can be hoped to increase the compliance.
- These aside, a sustained revival in consumption and investment demand is essential, which policymakers need to focus on.
Source: The Hindu
