GST collections decline to ₹93,960 crore in August

NEW DELHI : Goods and Services Tax (GST) collections declined to ₹93,960 crore in August -- the lowest monthly mop up so far this fiscal -- as consumers deferred purchase of goods to avail the benefits of cut in tax rate, the finance ministry said Saturday.

GST revenue for August was the lowest in the five months so far this fiscal. In July the collection was ₹96,483 crore, in June it was ₹95,610 crore, in May ₹94,016 crore and in April ₹1.03 lakh crore.

However, compliance improved as 67 lakh GSTR-3B or summary sales returns were filed during August, up from 66 lakh filed in July.

The August revenue collections reflect the purchase and sales activities conducted in the month of July.

Explaining reasons for the dip, the ministry said one of the main factors is probable postponement of sale of items for which tax rate was reduced by the GST Council in its meeting on July 21.

The rate cut on 88 items, including sanitary napkins, fridge, small screen TV, washing machine, footwear, among others, was effective July 27. Only 35 items were left in the highest tax bracket of 28% after the latest round of rate cuts.

“Since it would have taken some time for the market to pass on the benefit of reduced taxes, consumers would have postponed their decision to buy expecting the benefit. The actual impact of reduction of rate of taxes would be observed only from next month onwards as the rate reduction would have got affected only in last few days of the month,” the ministry said.

The GST Council hoped that tax reduction would reduce the cost to the consumers, thereby increase their purchasing capacity and add to the increased consumption in the economy.

For the bi-monthly period June-july 2018, compensation of ₹14,930 crore has been released to states.