The collections from goods and services tax (GST) was projected to be Rs 12 trillion in the current financial year. In other words, each month is expected to yield Rs 1 trillion from GST on an average. However, only two months — April and October — have so far hit the monthly target. In fact, average monthly target stood at Rs 970 billion in the first seven months of FY19. To meet the yearly target, each of the next five months has to yield Rs 1.107 trillion GST collections.
So far, none of the months have given this much revenue. In other words, average monthly revenues will have to rise at least 14 per cent in the next five months than what was achieved in the first five months to hit the target.
For fiscal deficit, Central GST is more important. CGST collections have to rise to Rs 3.4 trillion in the next five months against Rs 2.6 trillion in the first seven months. In other words, the average monthly CGST collections have to increase to Rs 60 billion in the next five months against Rs 37.7 billion in the first five to meet the budget target of Rs 6.04 trillion for FY19. The task seems impossible, even as the finance ministry seems confident that certain factors, such as e-way bill, will help it garner more CGST in the rest of the year than in the first seven months.
Any fall in collections on CGST will not burden the Centre alone as 42 per cent of it goes to the states under the devolution formula. Experts believe that the Centre might get 50-60 billion less from CGST and integrated GST this FY against the budget projections, a development that will force the Centre to look for other avenues to augment its receipts to meet the fiscal deficit target of 3.3 per cent of GDP in FY19.