CGST shortfall may force govt to cut spending to meet fiscal deficit target

Despite crossing the Rs 1-trillion mark twice this year, the goods and services tax (GST) collections are running well behind the budgeted target. As opposed to a monthly target of Rs 1.04 trillion, the monthly run rate adjusting for refunds, works out to around Rs 89,600 crore according to a report by Kotak Institutional Equities.

While the report pegs the Centre’s GST shortfall at Rs 1 trillion, adjusting for tax devolution to states, the Centre is possibly staring at a shortfall of Rs 58,000 crore.

Part of the gap may be plugged by higher than expected direct tax collections, though meeting the