Comments
Goods & Services Tax (GST) collections are expected to pick up during the second half of the current fiscal, according Revenue Secretary Ajay B Pandey.
He however said there is no possibility ‘as of now’ for any rate cut relief for the automobile sector.
“In the second half, at least I am optimistic that, there will be an improvement in the collection of GST revenue…. now during the ongoing festival season and then in the final quarter we hope the collection will pick up,” Pandey told BusinessLine . He said the auto sector is picking up and “if that sector picks up then definitely it will improve our revenue collection.”
He, however, cautioned that improvement in collection will depend upon the improvement in the economy.
Dip in collections
This remark comes at a time when GST collections dipped to a 19-month low in September to ₹91,916 crore, a 2.67 per cent decline year-on-year. During April-September, the domestic component grew 7.82 per cent annually, while the GST on imports showed a decline. Total collection grew 4.90 per cent. Since GST is a destination-based tax, the current downtrend in consumption is said to have impacted collections.
When asked about the reasons for the drop, he said it could be because of lower growth in certain sectors like automobile.
“Also, we have to consider that the current GST system gave very good revenue to the extent of 14 per cent annual growth to States during the last two years. In April, there was a record collection. If there was structural problem in GST, how could such performance have been achieved? ” he asked.
“ In the month of August, large part of our country suffered severe floods leading to disruptions. Trade and business were also impacted. All this and the extension of the last date for filing the tax returns by one month has impacted the revenue in the last two months,” he added.
Sectors such as automobile are pushing for rate reduction as sales declined for 11 consecutive months. Fossil-fuel based vehicles attract GST at the rate of 28 per cent plus cess. There is a feeling that lower duty at least on BS-VI standard compliant vehicles will boost consumption demand. However, Pandey remained non-committal.
Rate reduction request
“The auto sector’s rate reduction request was taken to the fitment committee and then to the GST Council and they did not agree,” he said.
Last week, the Prime Minister’s Office (PMO) held meetings with the Finance Ministry and State Governments to review the revenue collection and the level of compliance. Pandey said some States are doing well in returns filing while in case of others more measures are required.
“We are generating the red flag reports every month, where there are certain gaps or discrepancies in returns, particularly where the discrepancy is more than ₹5 lakh in any particular return. Those lists we share with the various States and with the CBIC. A review was done on the action taken on those reports that we shared,” he said.
Self-policing
He said the design of the GST is based on self-assessment and self-monitoring instead of a tax officer policing the companies. “It is the system that works on the principle of self-policing where the input tax credit gets determined by the supply invoices uploaded by the suppliers and that is why we say that the system doesn’t require any manual intervention or manual audit. We will further strengthen it and minimise manual intervention by tax officials,” Pandey said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.