Collections under the goods and services tax (GST) were marginally lower by some Rs 100 billion, compared to the original target set by the government for the first eight months of the roll-out of the new indirect tax.
The mop-up was subdued in October, November and January, and that has led to some shortfall.
Against the target of Rs 7.28 trillion for the eight months, collections stand at Rs 7.18 trillion. The target was arrived from the monthly run rate of Rs 910 billion. The run rate was, in turn, derived from the Budget Estimates and 14% indirect tax revenue growth for states for 2017-18.
Of the collections under the GST, Credit Suisse estimates that collections accruing to the Centre add up to Rs 4.6 trillion. This is roughly 3.3% higher than the Rs 4.44 trillion target in the Revised Estimates for 2017-18. These numbers suggest that states are likely to have received around Rs 2.6 trillion.
However, if one takes the provisional number for which a detailed break-up is available, GST collections add up to Rs 6.97 trillion. The provisional numbers were later revised upward.
The provisional GST numbers show that the Centre is likely to have collected Rs 1.15 trillion through the central GST (CGST) till March, while states are likely to have received Rs 1.66 trillion through the state GST (SGST). Collections under the Integrated GST (IGST) are likely to have touched Rs 3.52 trillion, while another Rs 627 billion is expected to have collected via the compensation cess.
Now, of the IGST collections, economists Business Standard spoke to say the Centre is likely to have received around Rs 715 billion till March, while states may have received another Rs 1 trillion. This means that unutilised IGST is likely to be around Rs 1.8 trillion.
“CGST collection was below target and unallocated IGST much above. This may persist in FY19 too: IGST on interstate transactions in supply chains where final consumption is GST exempt (e.g., diesel or electricity) will stay unclaimed and add to the Centre’s kitty. Unallocated IGST also has more CGST,” said Credit Suisse in a report.
These estimates are based on provisional GST figures and are likely to be revised marginally upwards as the Centre has revised headline GST collections in January and February.
In January, against provisional estimates of Rs 863.2 billion, GST collections have been revised upwards to Rs 880.4 billion. Similarly, for February, Revised Estimates show collections under the GST at Rs 892.6 billion, up from Rs 851.7 billion earlier.
“GST collections remained in the range of Rs 900-920 billion for July to September. They declined from October due to claims on pre-GST stocks. After that collections have remained around Rs 850 billion. The number of taxpayers has been growing steadily barring February. The new e-way bill system is likely to plug the leakages in the GST collections,” said Devendra Pant, chief economist, India Ratings and Research.
Madan Sabnavis, chief economist with CARE Ratings, said there had been a lot of volatility in the monthly numbers because of changes in rates. “We will get a clear sense of the trend in government revenues in the current financial year.”