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Tuesday, Aug 16, 2022
Outlook.com
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Government Poised To Comfortably Meet GST Budget Target Of Rs 1 Trillion For 2021-22

According to a government release, the Centre collected Rs 1.30 lakh crore as gross GST revenue for October, the second-highest since the indirect tax regime was implemented.

Government Poised To Comfortably Meet GST Budget Target Of Rs 1 Trillion For 2021-22
Government Poised To Comfortably Meet GST Budget Target Of Rs 1 Trillion For 2021-22
outlookindia.com
2021-11-01T17:37:16+05:30

The central government is expected to meet its Goods and Services Tax (GST) collection budget target of Rs 1 lakh crore for the year 2021-22. In the first seven months of this fiscal year, the government has already collected Rs 0.6 lakh crore.

“If the robust GST collections seen in the current fiscal continue on the back of sustained growth of the economy, it would be likely that the GST collection targets for the year would be exceeded. This would provide some fiscal space to absorb the increased healthcare costs etc," according to MS Mani, senior director, Deloitte India.

According to a government release, the Centre collected Rs 1.30 lakh crore as gross GST revenue for October, the second-highest since the indirect tax regime was implemented. Of this, Central GST (CGST) collected was Rs 16,424 crore, State GST (SGST) Rs 20,397, Integrated GST  (IGST)  Rs 49,079 crore (including Rs 25,762 crore collected on import of goods) and Cess Rs 6,949 crore (including Rs 809 crore collected on import of goods).

Month

Gross GST collection (Rs lakh crore)

January

1.20

February

1.13

March

1.24

April

1.40

May

0.98

June

0.93

July

1.16

August

1.12

September

1.17

October

1.30

“Although the supply issues related to semiconductor availability could continue to constrain the performance of GST compensation cess, we do not expect the budget estimate of Rs 1 trillion to be missed,” Aditi Nayar, chief economist ICRA, said.

The six-month high GST collections of October come on the back of the healthy pickup in GST e-way bills in September 2021, along with pre-festive season stocking and improved compliance. The October revenue was 24 per cent higher than the GST revenues in the same month last year and 36 per cent over 2019-20. Revenue from import of goods was 39 per cent higher and the revenue from the domestic transaction (including import of services) is 19 per cent higher than the revenue from these sources during the same month last year.

“… several restrictions placed on non-compliant taxpayers would also have resulted in many taxpayers gradually becoming more compliant and paying GST and filing returns promptly. Going forward, we may see more checks and balances being introduced to encourage filers and dissuade non-filers,” Mani said.

The Centre said that as a part of overall efforts to plug evasion, more steps to restrict fake input tax credit are under consideration of the GST Council.

The government said that the increased collection was in line with the economic recovery that is reflected in other macro data. “The revenues would have still been higher if the sales of cars and other products had not been affected on account of disruption in the supply of semi-conductors. Chart 1 shows the upward trend in number of e-way bills generated during the month and the amount of taxable value clearly indicating the recovery in economic activity,” the release said.

Nayar said that with the October GST e-way bills expected to exceed the level seen in the previous month, the headline GST collections would remain in a healthy range of Rs 1.25-1.35 lakh crore in November. “Overall, we expect the CGST collections to exceed the GoI's FY2022 BE of Rs. 5.3 trillion by up to Rs. 500 billion,” she said. 

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