Skip to main content

April GST collections at new high despite rate rationalisation in December

Goods and services tax (GST) collection touched a record high in April, exceeding Rs 1 trillion for the third time in four months. The mop-up was 10 per cent higher over the previous year. Gross collection for the month was Rs 1.13 trillion, said the finance ministry. Despite the recent rate rationalisation in December, a rise in collection was reported. Of the total collected, the CGST (central GST) contributed Rs 21,163 crore, the SGST (state GST) Rs 28,801 crore, the IGST (integrated GST) Rs 54,733 crore (including Rs 23,289 crore on import) and cess Rs 9,168 crore (including Rs 1,053 crore on import).
After settlement of the IGST and the balance IGST in a 50:50 ratio between the Centre and states on a provisional basis, the CGST stood at Rs 47,533 crore and SGST at Rs 50,776 crore. The CGST target in the Union Budget for 2019-20 is Rs 6.1 trillion. “The April collection indicates the tax base is increasing gradually, with GST getting stabilised with measures such as e-way bills and effective data mining. Perhaps one reason for this increase was also a push from businesses to their vendors for reporting sales of 2017-18, for which the last date of claiming credit coincides with GST filings for the month of March,” said Pratik Jain, partner at consultancy PwC India. He felt one could now expect the monthly collection to regularly exceed Rs 1 trillion.
Tax evasion could get tougher with the GST Network (GSTN, the levy's information technology backbone) and the income-tax department getting into a formal understanding to facilitate the exchange of data.The total number of GSTR-3B or summary returns filed for March up to April 30 was 7.2 million. April GST collections at new high despite rate rationalisation in December M S Mani, partner at consultants Deloitte India, said if the collection trend continued, the target for 2019-20 would be achieved without resorting to other measures. “An increase of over 16 per cent on the annual average does indicate GST revenues have now stabilised,” he said.
In its December 2018 meeting, the GST Council cut rates on 23 goods and services, including movie tickets, TV and monitor screens and power banks, and exempted frozen and preserved vegetables from the levy. Last July, the tax on small screen TVs, refrigerators and washing machines was cut to 18 per cent from 28 per cent. In November 2017, the rates for 178 items, including detergents, shampoos and beauty products, were reduced from 28 per cent to 18 per cent. “The increase in GST collection, despite rate rationalisation, is a welcome upshot for Indian economy. The major reason could be reconciliation of returns  and ledgers at the end of financial year 2018-19,” said Vishal Raheja, deputy general manager, Taxmann. Another reason could be computation of tax liability  due to filing of annual returns for financial year 2017-18, where the due date is end-June 2019, he added.
The Business Standard, 2nd May 2019


Popular posts from this blog

SC order on RBI circular: More options for banks to tackle defaulting firms

Lenders also have the option of restructuring the loans Lenders to companies which are under stress could now have three options to deal with them if they default on loans: take a haircut as part of a one-time settlement, restructure the loans for a longer tenure as they did when corporate debt restructuring schemes were allowed, or go to the Insolvency and Bankruptcy Code (IBC) for redress. These changes in the options available to lenders come, according to PE funds and bank lawyers who are involved in the IBC process, in the wake of the Supreme Court on Tuesday setting aside the 12 February RBI circular, which allowed a 180-day window to banks to resolve a company default.But they can still find a resolution. According to a Reserve Bank of India circular, a loan becomes a non-performing asset when banks cannot find a way of recovering their money in 90 days. In short, banks still have a window to resolve the default. Lenders can take a haircut as part of a one -time settlement of du…

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…