Rate reduction in over 19 product categories dented the Goods and Services Tax (GST) collection which reached Rs 93,960 crore in the month of August which is lowest in the current fiscal i.e. 2018-19.
According to a Finance Ministry Statement, one of the main factors for the dip in tax revenues is probable postponement of sale of items for which tax rate was reduced by the Council as the decision to reduce the tax rate was taken in meeting held on July 21 while the notification of the reduced rate came into effect only from July 27. It was decided to lower tax for over 80 products including smaller TV, fridge, washing machine, handloom & handicraft products, in 19 product categories.
“Since it would have taken some time for the market to pass on the benefit of reduced taxes, consumers would have postponed their decision to buy expecting the benefit. The actual impact of reduction of rate of taxes would be observed only from next month onwards as the rate reduction would have got affected only in last few days of the month,” the statement said.
It also mentioned that even past trend of indirect tax collection shows that while July collections are 8.2 per cent of the total annual collections, August collections are at a lower level of 7.7 per cent of the total annual collections. This is another reason for lower collections during the month of August as compared to that in July. The Government aims to collect Rs 1 to 1.10 lakh crore every month, however, revenue collection trend during last four months has been below Rs 1 lakh crore.
The total gross GST revenue collected in the month of August, 2018 is Rs. 93,960 crore of which CGST is Rs. 15,303 crore, SGST is Rs. 21,154 crore, IGST is Rs. 49,876 crore (including Rs. 26,512 crore collected on imports) and Cess is Rs. 7,628 crore (including Rs. 849 crore collected on imports). Number of return filers has gone up to 67 lakhs as against 66 lakh during previous months. The last date of filing return of July, 2018 in the State of Kerala was extended upto 5th October, 2018.
The total revenue earned by Central Government and the State Governments after settlement including provisional settlement of Rs. 12,000 crore in the month of August, 2018 is Rs. 36,963 crore for CGST and Rs. 41,136 crore for the SGST.