GST collections cross ₹ 1 lakh crore in April

RECORD REVENUE Higher GST collections reaffirm the increase in economic activity, says finance minister

NEW DELHI: Collections from the Goods and Services Tax (GST) touched a record ₹1.03 lakh crore in April, the first time they have crossed the ₹1 lakh crore mark in a month since the new tax regime debuted on July 1, highlighting an economic recovery.

The high number could also be attributed to improvement in compliances, the finance minis- try said in a statement, but cautioned that it could also be partly due to the payment of tax arrears.

The higher numbers weren’t a surprise because collections were (and are further) expected to increase in coming months with the implementation of the e-way bill or electronic tracking of the movement of goods from April 1. This will deter tax evaders looking to keep transactions completely off their books or to under-report their turnover.

“This represents a tipping point in the GST collections in India and indicates that the tax collections are stabilising; it is now essential to allow the reform to stabilise and not keep making constant changes as simplification and stability are essential attributes of increased tax compliance,” said M S Mani, partner, Deloitte India.

Other anti-evasion measures such as invoice matching with new improved tax return forms (likely to be finalized in the next GST Council meeting on May 4), introduction of reverse charge mechanism and the requirement for some taxpayers to withhold tax while making payments are expected to further strengthen the anti-evasion architecture.

Reverse charge is a mechanism through which large registered dealers have to pay tax for purchases from small unregistered dealers.

Finance minister Arun Jaitley said higher GST collections do reaffirm the increase in economic activity. “With t he improved economic climate, introduction of e-way bill and improved GST compliance, GST collections would continue to show a positive trend,” he wrote on microblogging site Twitter.

Of the total revenue of ₹1.03 lakh crore collected in April, ₹18,652 crore was central GST, ₹25,704 crore was state GST and ₹50,548 crore was integrated GST (including ₹21,246 crore collected on imports), a finance ministry statement said. The cess was ₹8,554 crore.

To be sure, compliance remains a challenge with only around two-thirds of the tax payers filing tax returns on time. The total number of GSTR 3B Returns filed for March up to April 30, 2018 was 6.047 million as against 8.712 million taxpayers who are eligible to file, putting the compliance rate at 69.5%.

Around 1.147 million composition dealers of a total of 1.931 million such dealers filed their quarterly return in April and paid a tax of ₹579 crore. Aug 2017