There was only one more occasion since GST’s April 2017 launch the collection for any month declined from the year-ago month — in August 2018.
After two months of contraction, GST revenue grew 6% in November 2019 (concerning mostly October transactions), to report the third-largest monthly mop-up of Rs 1.03 lakh crore since the tax’s launch in July 2017.
A pick-up in consumption during the festive season seems to have contributed to the increase in mop-up, rather than any incipient economic recovery.
November collections on domestic transactions witnessed a 12% rise while those on imports declined 13%. GST mop-up in October — concerning mostly September transactions — came in at Rs 95,380 crore, 5.29% lower than in the year-ago month. The September GST collections were just Rs 91,916 crore, a 19-month low and 2.7% lower than the year-ago month. There was only one more occasion since GST’s April 2017 launch the collection for any month declined from the year-ago month — in August 2018.
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While the monthly average Central GST (CGST) revenue to reach the Budget estimate for FY20 is Rs 43,833 crore, the average monthly mop-up during April-November period has been Rs 41,181 crore per month. That is a shortfall of a little over of Rs 2,500 crore per month or some Rs 32,000 crore a year.
The state governments are also feeling the pinch of anaemic GST collections, both directly and indirectly. Their requirement of compensation is rising and while the compensation cess kitty is shrinking. In the April-November period, the average monthly compensation cess kitty was Rs 7,900 crore, which would mean a shortfall of over `1 lakh crore on an annualised basis. Of course, since some Rs 70,000 crore of IGST are being distributed among the states, the shortfall might be reduced to that extent. Further, any shortfall in the overall GST kitty will impact the transfers to the states from the divisible pool of taxes.
Source: Financial Express
