The new financial year has started on a good note for the government with collection from the Goods and Services Tax (GST) crossing ₹1.13 lakh crore — an all-time high — in April. This is the fifth time that the ₹1-lakh-crore mark has been breached since the introduction of the new indirect tax regime.
Revenue in April 2019 was 10.05 per cent higher than April 2018 (₹1,03,459 crore). The total number of GSTR 3B Returns filed for March up to April 30 is 72.13 lakh. The revenue in April 2019 is 16.05 per cent higher than the monthly average GST revenue reported in financial year 2018-19 (₹98,114 crore).
For FY20, GST collection has been budgeted at ₹13.71 lakh crore, which means the average monthly collection should be slightly over ₹1.14 lakh crore. Experts believe that if this trend continues, the yearly target could be achieved.
MS Mani, Partner at Deloitte India, said the steep increase in collections despite the rate reductions effected during the past year indicates that GST revenues are now on the stabilisation curve. If this trend continues, then the target for FY20 could be achieved without resorting to other measures.
The collections reported relate to transactions in March, which would typically be higher, the month being the last of the fiscal when all businesses would be keen to achieve the sales targets for the year.
However, an increase of over 16 per cent over the annual average does indicate that GST revenues have now stabilised.
“In addition to the higher total collections, it is heartening to see individual collections under the CGST, the SGST and the IGST heads increasing, with the IGST on inter-State transactions showing a sharp increase,” Mani said. The over 20 per cent YoY increase in the number of returns filed indicates that more businesses have now embraced GST, he added.
According to Pratik Jain, Partner at PwC India, perhaps one of the reasons for the increase was a push from businesses to their vendors for reporting sales of FY18, for which the last date of claiming credit coincides with the GST filings for March 2019.
“While this level of tax collection may be unrealistic for all future months, the government would hope that the average monthly collection for FY20 is at least 10 per cent higher than FY19 2018-19 figures,” he said.