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GST collections for March have hit a record high of over ₹1.06 lakh-crore. On the other hand, direct tax collections (personal income-tax and corporate tax) are likely to miss the Budget estimates.
According to a Finance Ministry statement, GST revenue in March 2019 grew 15.6 per cent year-on-year. The revenue for the March 2019 quarter was 14.3 per cent higher YoY.
Monthly average up
The monthly average of GST revenue during FY19 was ₹98,114 crore, 9.2 per cent higher than FY18.
“These figures indicate that the revenue growth has been picking up in recent months, despite various rate rationalisation measures,” the statement said.
DK Pant, Chief Economist with India Ratings, said that despite monthly fluctuations, the GST collections trend since August 2018 has been gradually increasing. On a monthly average basis, GST collections in FY19 grew 9.2 per cent, lower than the nominal GDP growth of 11.5 per cent.
Collections grew 14.3 per cent in the March quarter, against 12.1 per cent in the December quarter.
“A higher GST collection will reduce pressure on the Centre emanating from compensation paid to the States for any revenue loss (14 per cent annual growth). Any surplus in the compensation cess account would be a bonus both for the Central and State governments,” he said.
MS Mani, Partner at Deloitte India, said a sharp increase of ₹9,000 crore compared to the previous month would lead to an expectation that the collections will now surpass ₹1 lakh-crore every month.
Direct tax collection
Meanwhile, a senior Finance Ministry official admitted that it would be difficult to achieve even the Budget estimate of ₹11.50 lakh-crore in direct taxes.
“Till 8 pm on March 31, total collection was approximately ₹11.33 lakh crore. Considering deposits till midnight, it could go up to ₹ 11.40 lakh-crore or slightly higher than that,” he said.
The revised estimate has been fixed at ₹12 lakh-crore, which seems beyond reach.
Another senior Finance Ministry official expressed optimism that amidst a mixed trend in tax collection, the government will be able to limit the fiscal deficit to the revised estimate.
The Interim Budget had set the revised estimate at 3.4 per cent, against an original Budget estimate of 3.3 per cent.
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