June GST collection below Rs 1 lakh cr mark for first time in FY20

The Goods and Services Tax (GST) collection for the month of June rose 4.52 per cent to Rs 99,939 crore from the year ago period, but fell below Rs 1 lakh crore monthly revenue mop-up for the first time this fiscal.

The collection is also lower compared to May, when the gross revenue had touched Rs 1,00,289 crore mark. The GST collection had reached all time high of Rs 1,13,865 crore in April, the first month of FY20. 

"The marginal dip in collections reinforces the point there is very little headroom at present for any further rate reductions. The lower than expected collections would lead more analysis of the data available with the GSTN in order to detect and plug any leakages," said M.S. Mani, Partner, Deloitte India.

While the trend of slight fluctuation in GST mop up is normal, a lower tax collection certainly adds to the pressure on government finances.

"The total gross GST revenue collected in the month of June 2019 is Rs 99,939 crore of which CGST is Rs 18,366 crore, SGST is Rs 25,343 crore, IGST is Rs 47,772 crore (including Rs 21,980 crore collected on imports) and cess is Rs 8,457 crore (including Rs 876 crore collected on imports)," said a Finance Ministry statement.

The total number of GSTR 3B Returns filed for the month of May up to June 30, 2019 is 74.38 lakh. The GSTR-3B Form records the summary of outward supplies, input tax credit (ITC) claimed and net tax payable.

"GST collections have almost touched 1 lakh crore mark which has been the general trend over last few months. More than the amount, its important to note that it is only 4.5 per cent higher than corresponding period of last year, which would certainly be below the Government's expectations. This moderate growth in collections (over last year) would be a concern and we should expect some tangible measures in form of increased audits and scrutiny over next few months," said Pratik Jain, Partner and Leader, Indirect Tax, PwC India.

A higher GST collection boosts the overall indirect tax collection of the government and gives more elbow room to spend on social infrastructure and public welfare schemes. It also eases Centre's burden of compensation to states on account of loss of revenue due to new tax regime.

The monthly average of GST revenue during 2018-19 was Rs 98,114 crore, up 9.2 per cent compared to monthly average in financial year 2017-18. The revenue in June 2019 is 1.86 higher than the monthly average of GST revenue in FY19.

These figures indicate that the new regime has now largely stabilised. The collection has been robust in spite of several rate cuts across various items.

"The Government has settled Rs 18,169 crore to CGST and Rs 13,613 crore to SGST from IGST as regular settlement. The total revenue earned by Central Government and the State Governments after regular settlement in the month of June, 2019 is Rs 36,535 crore for CGST and Rs 38,956 crore for the SGST," the ministry statement said.

Jain added: "...the Government may explore options as to how consumers are incentivized to be more vigilant on tax compliances. This may also get the Government to rethink about the projected GST collection in 2019-20, which we will get to know when the Union Budget is presented later this week."  IANS