GST collections slip to Rs 94K-cr in May Mop-up higher than monthly average, state collections at Rs 21.7K cr

The total Goods and Services Tax (GST) collections fell to Rs 94,016 crore from over Rs 1.03 lakh crore in April, the finance ministry said on Friday.

However, the GST collections in May were, higher than the monthly average of Rs 89,900 crore collected from July last year, when the indirect tax was introduced, till March this year, the ministry said.

The GST collections in April were the highest ever in a month since the new indirect tax regime was introduced from July 1.

The goods and services tax collections in April were higher because of "year-end effect," the ministry said in a release.

Finance Secretary Hasmukh Adhia said that the total GST collection for May is higher compared to average monthly collection of Rs 89,885 crores of 2017-18. "This reflects better compliance after introduction of eway bills," tweeted Adhia, who is also the Revenue Secretary.

Last month, the ministry had said that the April GST collections should not be taken as a trend for future since taxpayers paid arrears for the previous months in March.

The GST collection for May includes Rs 21,700 crore of State GST, Rs 15,900 crore of Central GST, Rs 49,100 crore Integrated GST and Rs 7,300 crore of cess.

As many as 62.47 lakh businesses filed their summary sales return GSTR-3B in May as against 60.50 lakh a month ago, the ministry said.

PwC India Partner and Leader Indirect Tax Pratik Jain said: "Now that intra state e-way bill system have also been introduced in most states, one could expect some incremental impact on revenues in next couple of months". GSTR 3B is a monthly return to be filed by registered taxpayers on selfdeclaration basis by the 20th of the next month.

The total revenues earned by the central and the state governments after the settlement in May were Rs 28,800 crore for Central GST and Rs 34,000 crore for State GST, the ministry said.

EY India Tax Partner Abhishek Jain said, "With introduction of other anti-evasion measures like intrastate credit matching, E-Way bills, TDS/TCS, etc, these collections may further increase in the coming months".

Deloitte India Senior Director Atul Gupta said: "The growth in the economy in the January-March quarter has been robust and is indicative of the fact that the initial hiccups in GST implementation are now largely behind us.

In May, Rs 6,700 crore had been released to the states as GST compensation for March. "Therefore, the total GST compensation released to the states for the 2017-18 (July 2017 to March 2018) has been Rs 47,844 crore," the release said.

The government has shifted to a cash-based accounting system to report goods and services tax collections instead of accrual-based system from April. The cashbased accounting system recognises revenues in the period when they are received, while accrual accounting recognises revenue for the period when it is earned. In other words, under the earlier system, the collections announced today would have been for April instead of May.

The Budget for 2018-19 (Apr-Mar) has projected GST collections of Rs 7.439 lakh crore, excluding the state GST.