Centre, states set ₹12 lakh cr GST revenue target for FY19
POSITIVE OUTLOOK The ongoing economic recovery boosts govt’s confidence NEW DELHI:
Buoyed by the collection trends of Goods and Services Tax (GST) in 2017-18, the target for this financial year has been set at ₹12 lakh crore.
The GST Council noted that the average monthly receipts in the last fiscal, despite several disruptions, was ₹89,885 crore— marginally below the monthly target of ₹91,000 crore.
“GST receipts in FY18 has not been bad. The revised monthly revenue target for FY19 takes into account a 14% increase in states’ revenue growth estimate for compensation,” said a finance ministry official, who asked not to be named.
The positive impact of e-way bill, adopted from April 1, on GST collections is expected to reflect by June-July, the official added.
Policy makers’ confidence of generating higher revenue from GST stems from the anti-evasion measures being put in place and the ongoing economic recovery.
GDP growth has accelerated from 5.7% in the April-June period of FY18 to 6.5% in the second and 7.2% in the third. Growth is projected at 6.6% in FY18, implying that growth in the final quarter will be 7%.
The measures meant to curb evasion include adoption of e-way bills for tracking goods movement electronically, matching information from various sources with the declared sales and the proposed revamp of the return filing system.
Another official pointed out that the system was stabilising and revenue collections were improving. “GST receipts in April (for sales in March) is expected to be around ₹95,000-96,000 crores,” said the second official, who also spoke on condition of anonymity.
A few rule changes in the offing for tightening compliance is expected to add momentum to this revenue growth.
The authorities are now linking e-way bills generated by businesses for goods shipment with their sales returns in GSTR 1 form to detect tax evasion.
“Same invoices go into e-way bill and to GSTR 1. Once GSTR 1 returns are filed, we can match the data. We know who the sender is and who the buyer is. We can pick up all the e-way bills of a sender and see if they are part of the GSTR-1 filed,” said Prakash Kumar, chief executive officer of GST Network, the company that processes tax returns.
Although taxpayers can opt for automatically filling their e-way bill details in GSTR 1, many are yet to opt for it.
The increasing linkage between direct and indirect tax return filings is also expected to check tax evasion. The income tax return forms for assessment year 2018-19 mandate small businesses to quote their GST identification numbers (GSTIN). All opting for presumptive taxation scheme under income tax law will have to provide their GSTIN and details of turnover reported under GST, as the government seeks to check tax evasion among small businesses. Under presumptive tax scheme, businesses with a turnover of less than ₹2 crore need not maintain books of accounts and instead, pay income tax on the basis of a certain percentage of their turnover.