Lower GST collection could change its fiscal maths
NEW DELHI : The national tax Goods and Services Tax (GST) recorded the lowest revenue collection in 19 months since it was introduced in July 2017, just over two years ago, according to data released by the government today.
The centre raked in Rs. 91,916 crore under various categories of the Goods and Services Tax (GST) in September – a fall by 2.8 per cent from the year-ago period when the government collected Rs. 94,442 crore.
The Narendra Modi government was dealt a mixed bag of news on the economic front on Tuesday, even as it expects the upcoming festival season to perk up consumer demand and lift growth in the second half of this financial year.
With auto sales continuing to drop for the month of September and the stock markets having handily shed their initial euphoria after the corporate tax cuts were announced, all eyes are on the Reserve Bank of India’s monetary policy review meeting later this week.
The revenue collection in the same month a year ago stood at Rs 94,442 crore. The fall in GST collection may widen the fiscal deficit, which is already under strain after the government last month cut corporate tax rates.
Fiscal deficit is a shortfall in the government’s income compared with its spending. While announcing the corporate tax cuts, Finance Minister Nirmala Sitharaman said the centre was “conscious of the impact all this will have on our fiscal deficit”.
“The total gross GST revenue collected in the month of September, 2019 is Rs. 91,916 crore of which CGST is Rs. 16,630 crore, SGST is Rs. 22,598 crore, IGST is Rs. 45,069 crore (including Rs. 22,097 crore collected on imports) and cess is Rs. 7,620 crore (including Rs. 728 crore collected on imports),” the Finance Ministry said in a release.
The total number of GST returns filed for the month of August (up to September 30) stood at Rs. 75.94 lakh.The government has transferred Rs. 21,131 crore to Central-GST (CGST) and Rs. 15,121 crore to State-GST (SGST) from Integrated-GST (IGST) as regular settlement.
The gross GST collections comprised of Rs. 16,630 crore collection through CGST, Rs. 22,598 crore in State-GST and Rs. 45,069 crore through IGST. The total revenue earned by the central government and the state governments after regular settlement in September was Rs. 37,761 crore for CGST and Rs. 37,719 crore for the SGST, it said.
During April-September, the domestic component has grown by 7.82 per cent, while the GST on imports has shown negative growth and the total collection has grown by 4.90 per cent, it added.
The lower indirect tax collection is set to put further pressure on the government finances.
With government already committed to scaling up public spending to boost the sagging economy, lower GST collection could change its fiscal maths. The government needs an average monthly collection of more than 1 trillion rupees every month to meet its budget target.
Generally-speaking, collections of over Rs 1 lakh crore a month are seen as healthy. The dip in September is, therefore, reflective of the larger slowdown in the Indian economy.
Both auto companies reported less-than-ideal sales numbers for September 2019, continuing many months of low sales in the overall industry. Maruti Suzuki, India’s largest car-maker, reported a 24.4% decline in sales at 1.22 lakh units in September 2019. The company had sold 1.62 lakh units in September 2018, it noted in a statement.
Domestic sales declined by 26.7% at 1,12,500 units last month as against 1,53,550 units in September 2018, it added. Sales of mini cars comprising Alto and WagonR stood at 20,085 units as compared to 34,971 units in the same month last year, down 42.6%.
Tata Motors, on the other hand, also posted equally worrying numbers but added that it expected sentiment to pick up in the next few months. In a statement put out on Tuesday afternoon, the company stated that it had sold 36,376 units in September 2019, a decline of 48% compared to the 69,991 units it had sold in the same month last year.( With Agency Inputs ).
