GST collection tops Rs 1 lakh cr for second straight month

Impact of global minimum tax on India
The 15% global minimum tax may see India losing some revenue since a large number of technology companies would not be taxable in the country.

The last month of the calendar year ended on a positive note for the Narendra Modi government with the goods and services tax collections crossing Rs 1 lakh crore mark for the second month running. However, the December GST mop-up of Rs 1.03 lakh crore fell short of the target of Rs 1.1 lakh crore set by the revenue department for the last four months of the financial year. The GST collection in November was Rs 1.03 lakh crore, the highest since April.

The December GST collection includes Rs 19,962 crore in CGST, Rs 26,792 crore in SGST, and Rs 48,099 crore in IGST. The IGST collection comprise Rs 21,295 crore levied on imports and Rs 8,331 crore collected through cess.

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The revenue shortfall in the current financial year is likely to cross the government’s own estimate of Rs 2 lakh crore. This is because of the Rs 1.45 lakh crore tax concessions made by the government in September and the lower than expected GST mop-up. To meet the revised GST target, the government must collect Rs 1.25 lakh crore in at one of the last four months of the financial year ending March 31.

Among the positives for the Modi government was a 16% growth in GST revenues collected from domestic transactions, compared with December 2018. The total GST collection also recorded an increase of 9% compared with the same month last year, despite IGST on import of goods recording a 10% fall.

The revenue department has settled Rs 21,814 crore to CGST and Rs 15,366 crore to SGST from IGST. Post settlement, the total revenue collection of the Centre and states stood at Rs 41,776 crore in CGST and Rs 42,158 crore in SGST.

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Worried about the low GST collections, the revenue department is looking at stricter monitoring of businesses. The tax authorities will access bank account details of businesses to verify their GST filings, a finance ministry official told the Times of India. The weak compliance is seen as the reason for falling GST collections as there is no fool proof system to cross-check the information furnished by businesses.