GST collection in February below December level

Collection under the goods and services tax (GST) dipped for the second month in a row to ~851.7 billion in February. It was ~863.2 billion in January, which too saw a decline.

The dip this time could be owing to fewer days in February as well as the utilisation of integrated goods and services tax (IGST) credit for tax payments. The revenues were not only smaller than what was collected in January but also the secondlowest so far. The lowest collection was in November at ~837.2 billion. Collection was lower than the ~910 billion target set at the time of the introduction of the GST. GST collection met the target only in the first three months of the roll-out — July, August and September. The mop-up did not touch ~900 billion after that because IGST credit was utilised for tax payments. Cumulatively, the GST yielded ~7.1 trillion till February.

While the collections are for February, these were paid till March 26. Only five days are left to pay the GST dues, after which 2017-18 would end. The Revised Estimates (RE) of the GST in Budget 2017-18 pegged the collection, without state GST (SGST), at ~4.4 trillion for the first nine months of the GST roll-out. The SGST, so far, comes at around ~2.6 trillion, said experts. As such, the total GST collections pegged under the RE would come around ~7 trillion.

It is somewhat complicated to compare the GST figures paid till March 26 —~7.1 trillion — with the RE. It is so because the RE also had the state compensation figure of ~613.3 billion, some of which has already gone to the states. There is also the IGST figure given in the RE at ~1.6 trillion, some of which has already gone to the states. Roughly, the GST collections match the RE.

M S Mani, partner, Deloitte India, said: “It appears that GST collection is now entering the stabilisation phase, although the expected revenue garnering appears to be taking time. It would be logical to assume that significant amounts of transition credits availed of have been utilised, hence, the collections would progressively improve.”

Abhishek A Rastogi, partner, Khaitan & Co, said there were some days left in March and the assessees were also facing the burden of direct tax payments in the form of advance tax and tax deducted at course. “Late GST payments cannot be ruled out,” he said. Over 69 per cent of the assessees filed returns in February, about the same as in January. Vishal Raheja, deputy general manager, GST, Taxmann, said: “Compliance has improved and more than 69 per cent taxpayers have filed returns for February.”

Experts said compliance would improve once the e-way bill came into effect from April 1 for interstate movements of goods worth more than ~50,000. Aditi Nayar, principal economist, Icra, said: “The impending roll-out of the e-way bill is expected to improve GST collection.” In the GST collection, ~142.3 billion was on account of the SGST, ~437.9 billion came under the IGST, and ~83.3 billion was compensation cess. Further, ~113.3 billion is being transferred from the IGST to the central GST (CGST) account and ~134.8 billion to the SGST account. After factoring in this transfer, collection stood at ~255.6 billion under the CGST and ~334.4 billion under the SGST in February.