GST mop-up: Rs 1-trillion target missed for fifth month in a row

This has brought down the average monthly GST collection in 2018-19 marginally, from Rs 967 billion (April - August) to Rs 963 billion (April - September)

Collections from the goods and services tax (GST) fell short of the target of Rs 1 trillion-a-month for the fifth consecutive month in September this financial year. However, the collections at Rs 944 billion last month was up 0.5 per cent over the August figures, which stood at Rs 940 billion. GST rate cut on a range of products from July 27 likely to have resulted in the subdued numbers. 

Experts are now pinning hope on the festival months to see if the target can be achieved.  So far, the target was met only in April, primarily owing to the payment of arrears of earlier months. 

Year on year, GST collections improved 2.5 per cent over September 2017 mop-up of Rs 922 billion. The y-o-y growth in August was 3.3 per cent.

"The collections are still six per cent short of the desired number," Abhishek Rastogi, counsel of Khaitan & Co. said.  The September figure has brought down the average monthly GST collection in 2018-19 marginally, from Rs 967 billion (April - August) to Rs 963 billion (April - September).

Sources in the government pointed to two reasons for the tepid growth in GST collections. First, the rate reduction in various items in successive council meetings has had a downward impact.

Secondly, owing to explicit political concerns in an election year, the tendency to assess and penalize for non-compliance has reduced.

For the second time in the financial year, the collection of Integrated GST crossed Rs 500 billion in September. It had sneaked above the mark in April, when the monthly overall GST collection had crossed Rs 1 trillion for the first time.

Parag Mehta, partner, NA Shah Associates, said, "The festive season, setting in the next three months, should ensure collections of around Rs 1 trillion per month."

Abhishek Jain, partner EY, said the September figure brought a gleam of expectations for the future trends.  Pratik Jain, partner with PwC, however, said the October revenues could be impacted owing to higher refunds from now on than those in the earlier months. 

Apart from Rs 500 billion as IGST, Rs 153 billion was collected as SGST, Rs 210 billion as CGST and just less than Rs 80 billion as compensation cess. The total revenue earned by Centre and the states after IGST settlement stood at Rs 306 billion for central GST, and Rs 350 billion for state GST. The remaining part of IGST remains to be apportioned. About 6.7 million GSTR-3B returns have been filed in September, almost as many as in August. 

This was the reason why the September number was lower than Rs 964.8 billion in July.