Since its rollout 13 months ago, the new indirect tax has yielded Rs 1 trillion only in in April 2018
Illustraton: Uttam Ghosh/Rediff.com
Goods and services tax (GST) collection rose in July but stayed well below the government's target of Rs 1 trillion for a third month in succession of the current financial year (starting April 1).
The tax came into effect from July 1 last year. Last month's collection was Rs 96,500 crore, after Rs 95,610 crore in June and Rs 94,000 crore in May.
The official data was released on Wednesday. The pace of collection is expected to slow down in the coming months, as the impact of rate reductions by the GST Council on a little over 100 items at its previous meeting takes effect.
“This (July collection) is broadly on expected lines,” the finance ministry stated on Wednesday.
According to the Union Budget and expected 14 per centgrowth in state GST figures, year-on-year, the monthly average was expected to be Rs 1.12 trillion in 2018-19.
Hasmukh Adhia, the finance secretary, had said he expected an average monthly collection of Rs 1 trillion this year, perhaps a little less in the initial months but showing a rise in the remaining ones.
Of the July collection, Central GST was nearly Rs 15,880 crore, State GST Rs 22,290 crore, Integrated GST Rs 49,950 crore and cess Rs 8,360 crore.
Earlier, the GST Council had reduced rates on a host of items in the highest slab of 28 per cent, on a little over 100 items.
These included refrigerators, washing machines, and cosmetics, vacuum cleaners, among others.
The revisions took effect last Friday. The government expects a hit of Rs 8,000-9,000 crore in revenue from the rate reduction.
“The steady increase in GST collection this financial year is quite positive, slowly inching towards the Rs 1-trillion mark per month.
"However, collections in coming months would need to be monitored, to see whether momentum of the increased collections is maintained,” said Abhishek Jain, partner at consultancy EY.
Since its rollout 13 months earlier, the new indirect tax has yielded Rs 1 trillion only in in April 2018.
It also counted as an aberration, since that month (start of a new financial year) saw payment of arrears from earlier months.
Abhishek A Rastogi, partner at Khaitan & Co, said outflow from the large refunds due in the coming months could hit revenue.
“While collection looks good, we need to analyse the quantum of the refunds that are pending,” he said.
Until July 30, a little more than 6.6 million GST-3B or summarised returns had been filed for June. These numbered 6.4 mn in May.
Close to Rs 3,900 crore was released to the states as GST compensation for the months of April and May.