Macro Economy

GST mop-up exceeds ₹96,000 crore in July

Our Bureau New Delhi | Updated on August 01, 2018 Published on August 01, 2018

The total collection from Goods and Services Tax (GST) in July exceeded ₹96,000 crore, the Finance Ministry said. This is higher than the June number, but slightly lower than the target of ₹1 lakh crore.

Interim Finance Minister Piyush Goyal said the collection is in line with the government’s target and it is set to increase further in the coming months with the rise in compliance and market demand.

“These are monsoon months during which usually the economic activity is relatively lower. We still have the busy season ahead of us. Considering, that we have very good collections on GST,” he told reporters here. He said the Cabinet took note of the recent decisions of the GST Council and also considered the proposed Bill to bring in amendments to various GST laws.

A Finance Ministry statement said the total gross GST revenue collected in July is ₹96,483 crore of which CGST is ₹15,877 crore, SGST is ₹22,293 crore, IGST is ₹49,951 crore (including ₹24,852 crore collected on imports) and cess is ₹8,362 crore (including ₹794 crore collected on imports). “This (revenue collection) is broadly on expected lines,” the statement said.

 

 

The latest figure does not include the impact of rate cut which was made effective from July 27. The GST Council, in its meeting on July 21, decided to lower tax on around 100 products which mainly include consumer electronic products such as smaller TV, fridge, washing machine, hair dryers, iron etc beside sanitary napkins, handloom and handicraft products. It is estimated that total revenue loss on account of rate cuts will be around ₹9,000 crore which may grow to ₹15,000 crore if refund of accumulated credit on account of inverted duty structure to fabric manufacturers taken into accounts.

Better GST collection is also critical from the Centre’s fiscal deficit point of view. The deficit is estimated at 3.3 per cent of GDP. Now, if GST rate cuts impact overall revenue, then it will be tough for the Government to keep the deficit at the budgeted level. The deficit has already touched 68.7 per cent of the Budget Estimate in the first three month of the current fiscal.

Commenting on the collection, Abhishek A Rastogi, Partner at Khaitan & Co, said while collection looks good, there is need to analyse the quantum of the refunds which are pending before the authorities. The refunds pending will show the actual reduction which may happen in the subsequent months. “The budgetary support announced has not been given to various units located in the backward zones. There could be a hit in the months to come due to this outflow of refunds,” he said.

Published on August 01, 2018
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