GST collections in the month of October crossed the Rs 1 lac Crore mark second time with total collections for the month standing at 100710 crore.
This momentum, coming in the midst of a marginal increase in the total filings compared to September. It is expected to be sustained in the coming months supported by the festive season that in underway.
This momentum, coming in the midst of a marginal increase in the total filings compared to September. It is expected to be sustained in the coming months supported by the festive season that in underway.
GST stands for goods and Services tax and this is one indirect tax for
the entire nation. The tax is based on the destination or end product, which
was applied on 1July 2017.
Previous Years
The average GST revenue during 2017- 2018 was 89,885 crore.
The reason
The reduction in tax collection in July 2018 has helped in improved
compliance among small businesses. That eventually lead to the increase in
overall tax collection. Direct tax collections have also increased over the
past few years reaching an all-time high of Rs 10 lakh crore in 2017- 2018.
These two developments will help in maintaining the deficit as government’s
fiscal deficit has already reached 95.3% of its budgetary estimates in first
half of 2018. The GST collection in October is also still significantly below
the expectations of ₹1.10 lakh crore. So the current spurt may be simply owing
to the festival season
Challenges and
Problems
Many consumers are still facing business dullness in sale, as car sale
has been hampered.
In recent months various economic indicators have failed to impress.
Core sector growth dropped to a four month low in September, and these
growth related factors will weight negative on tax collection in coming months.
The export sector has been affected by undue delays in GST
Conclusion
It may
also be too soon to say that GST collections are on a sustainable uptrend
simply based on the October collections. Collections during the first six
months of the current fiscal year fell short of target by over ₹22,000 crore
despite record collections in April. The government should continue the effort
to make the GST more taxpayer-friendly, bringing down the cost and hassle of
compliance, to achieve a sustained rise in collections.
