Goods and services tax (GST) accumulations broke the Rs 1-lakh crore mark in July 2019 when discussion on the economic showness is erupting. At Rs 1.02 lakh crore, GST accumulations rose 6 percent and 2 percent, separately compared with the figures in July 2018 and June 2019. However, Rating organization Crisil recently reviewed downwards the gross domestic product(GDP) focus for 2019-20 to 6.9 percent from 7.1 percent prior. All things considered, the monthly GST accumulations crossing the Rs-1 lakh crore in three of the four months of the current fiscal demonstrate talks of economic slowness could be blowing out of the proportion. The monthly average has been Rs 1.04 lakh crore so far compared with Rs 98,114 crore during 2018-19.
So, are rising accumulation figures mirroring the true condition of the economy or featuring a conflicting trend?
The appropriate response lies in government’s budgeted target. The average monthly collection is still lower than Rs 1.06 lakh crore required for meeting the government’s budgeted target for the year for Central and Integrated GST.
Experts believe monthly GST accumulations are rarely touching the Rs-1 lakh crore mark accurately because of the economic slowdown, else the numbers could have been greatly improved.
“Accumulations are floating around Rs 1 lakh crore a month because of the economy slowdown, else it ought to have been more. Since GST depends on the price charged, lower domestic increase and import values would have brought muted accumulations,” MS Mani, senior director, Deloitte India says.
As indicated by him, improved accumulations in the course of the most recent year could be because of an increase in compliance thanks to GST Council occasionally making rates and procedures sensible.
The total number of GSTR 3B returns filed for the month of June up to July 31, 2019 remain at 75.79 lakh contrasted with 74.38 lakh for the month of May up to June 30, 2019. Till September last year the number of returns filers used to be around 67 lakh.
So, while increased compliance may have been pushing GST accumulations past Rs-1 lakh crore mark, the slowdown in the economy is resulting accumulations being much lower than the required Rs 1.06 lakh crore.
As per a Kotak Economic Research report, the required run-rate (normal monthly accumulation) for the rest of 2019-20 is currently around Rs 1.14 lakh crore. At the present run-rate, the government could see a shortfall of Rs 1.8 lakh crore in GST accumulations.
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