GST collections for Jan may hit record ₹1.15L cr

NEW DELHI: Goods and Services Tax (GST) collection may hit a record ₹1.15 lakh crore in January, while the shortfall in gross direct tax collections may be only ₹11,000 crore in the first 10 months of the current financial year as compared to same period last year, two government officials familiar with the matter said on condition of anonymity.

Both direct and indirect tax collections are on track despite a slowdown in the economy, mainly because of efficient tax administration, albeit minus any overreach, they added.

The overall impact of these numbers will have to be seen; the finance ministry budgeted an ambitious 25% growth in net tax revenue to ₹16.5 lakh crore in 2019-2020. It managed to collect less than half of that in the first eight months of the year. To be sure, tax collections, especially income tax, are usually backended in January, February, and March.

India’s gross domestic product (GDP) grew at 4.5% in the second quarter of current financial year, the lowest since March 2013. According to the government’s first advanced estimates, India’s GDP is expected to grow at 5% in 2019-20, the lowest since 2008-09.

“The GST collection in January is as per the revised target of ₹1.15 lakh crore. It is achievable as we have been able to plug revenue leakages worth about ₹40,000 crore by using technology and data analytics,” one of the two officials said. The highest GST collection in a single month so far was ₹1.13 lakh crore in April 2019.

Last month, the collection was ₹1.03 lakh crore.

Earlier this month, at a highlevel meeting, the Department of Revenue raised the GST collection target to ₹1.15 lakh crore for January and February 2020, and ₹1.25 lakh crore for March 2020, the last month of the current financial year “with specific focus on stopping fraudulent input tax credit (ITC) claims”, said the second official.