GST revenue collected crossed the target of ₹1 trillion for the third time in this fiscal, despite tax rate cuts
The GST Council suspended some self-policing features, such as matching invoices of suppliers and buyers
New Delhi:Goods and services tax (GST) collections by Union and state governments scaled the monthly target of ₹1 trillion in January, the third time in this fiscal, despite tax rate cuts.
Total gross GST revenue collected in January crossed ₹1 trillion on Thursday, “a significant improvement" over the ₹94,725 crore collected in December and the ₹89,825 crore in January 2018", the finance ministry said in a social media post.
The collection for the full month and the break-up between the central and state receipts will be released on Saturday, said the finance ministry.
GST receipt struggled to touch the target of ₹1 trillion for most of the current fiscal as policymakers took a lenient approach to tax enforcement while businesses, especially the smaller ones, struggled to settle into the new regime.
The GST Council suspended some self-policing features, such as matching invoices of suppliers and buyers, to provide relief to businesses from the rigours of a technology-driven tax returns regime.
It also liberalized an easy tax payment scheme for small businesses, called the composition scheme. States are compensated for their revenue shortfall under a constitutional guarantee.January’s increase in receipts points to the advantages of a simplified tax regime, according to finance experts.
“Exceeding the ₹1-trillion mark for the third time this fiscal comes as a welcome relief for the government, particularly after some dip in the last month. This again underlines that collections are increasing steadily as compliance requirements are getting simplified, rates are getting reduced and administration is getting sharper," said Pratik Jain, partner and leader of indirect tax, PwC India.
Sustaining the collection growth momentum will be key in meeting the annual GST collection target of ₹12 trillion, which will have a bearing on the fiscal health of both the Union and state governments.