Source: Business Today
In midst of the economic slowdown, Goods and Services Tax (GST) collections crossed the Rs. 1-lakh crore mark in July 2019. GST collections stood at Rs. 1.02 lakh crore rising 6 percent and 2 percent, in comparison with the figures in July 2018 and June 2019 respectively. At the same time, the rating agency Crisil adjusted the gross domestic product (GDP) target downwards for 2019-20 to 6.9 percent from 7.1 percent earlier.
The monthly collections of GST have crossed Rs. 1 lakh crore in three of the four months of the current financial year. This could indicate that the talks of the economic slowdown might be simply blown out of proportion. The monthly average collection so far has been Rs. 1.04 lakh crore compared to Rs. 98,114 crore during 2018-19. This begs the question, are rising collection figures truly reflecting the state of the economy or revealing a contradictory trend?
The answer might lie in the government’s budgeted target. The average monthly GST collection is still lower than Rs. 1.06 lakh crore needed to meet the government’s budgeted target for the year for Central and Integrated GST. Many experts consider the reason for monthly collections barely touching the Rs. 1-lakh crore mark is because of the economic slowdown. Otherwise, it could have been much better.
Thanks to the GST council making rates and procedures reasonable from time to time, some improvement in GST collections over the last year could be due to increased compliance. The total number of filing of GSTR-3B returns for the month of June up to July 31, 2019, is 75.79 lakh compared to 74.38 lakh for the month of May up to June 30, 2019. The number of returns filed until September used to be around 67 lakh.
Hence, while increased compliance could be pushing GST collections above Rs. 1-lakh crore mark, the slowdown in the economy is the leading cause for it being much lower than the required Rs. 1.06 lakh crore.
Create a free account to get access and start
creating something amazing right now!