New Delhi: Indirect tax collections are likely to fall short by Rs90,000 crore in the current fiscal on account of subdued GST mop-up and excise duty cut on petroleum products, an SBI research report said on Thursday.
According to the Budget Estimate, the government proposed to collect Rs7.4 trillion from the goods and services tax (GST) and Rs2.6 trillion from Union excise duties.
Excise duty was subsumed under GST, except on petroleum items and liquor & alcoholic products used for human consumption.
“We expect a shortfall of around Rs90,000 crore in GST and excise collections, out of which Rs10,500 crore is on account of reduction of excise duty on petroleum products by Rs1.50 per litre," said SBI Ecowrap report.
Total GST collections come at Rs6.78 trillion as compared with the 2018-19 Budget Estimate of Rs7.44 trillion, including SGST and IGST. “If we exclude SGST and proceeds of IGST contributed to states, the GST collection of the Centre comes to Rs3.46 trillion (47% of BE)," the report said.
However, it added that customs collections may overshoot the budgeted amount (Rs1.12 trillion) by Rs14,000 crore.
The report further said that for the second year in succession, direct tax collections are likely to be higher than the budgeted targets by at least around Rs20,000 crore. In addition to this, the government is expected to add another Rs20,000 crore to its kitty from evaded taxes.
As per the report, the recent decline in oil prices might compress the current account deficit (CAD) by around $5-6 billion from “our estimates of $78 billion in current fiscal".
“This will imply CAD settling down at 2.6% of GDP (previously 2.8% of GDP)," it added.
Additionally, if crude oil averages $65 and the rupee stays at 70 against the dollar, then petrol and diesel prices could fall further on an average by Rs4 or more.
This implies that diesel prices could head well below Rs70 per litre and petrol well below Rs75.
SBI expects inflation to hit 2.7-2.8% in the next couple of months.