GST Collection – 1 lakh Crore and More - Analysing it! - Seeker's Thoughts

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Saturday, 3 November 2018

GST Collection – 1 lakh Crore and More - Analysing it!


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.




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.