The government is gearing up to plug all shortcomings in order to increase the Goods and Services tax revenue collections and plug leakages. GST revenue collections for the month of October fell to Rs 83,346 crore from a high of over Rs 92,000 crore in September, a fall of 12 per cent from the previous month.
Concerned over the falling revenue trend, the Finance Ministry is learnt to have called a meeting with top departmental officials to discuss ways to increase the collections.
While Finance Secretary Hasmukh Adhia will be meeting state and central revenue officials on Saturday, the Central Board of Excise and Customs (CBEC) will separately hold a meeting of its officials via video conferencing on Tuesday to discuss urgent GST issues.
The government’s concerns stem from a couple of reasons. First is the decrease in the Centre’s share of GST revenue. The Centre’s share fell after payment of compensation cess to states. The total central GST collection in the first four months of the new tax — July, August, September and October — has been Rs 58,556 crore.
The second reason behind the government’s worries is based on the GST Council’s recent decision to reduce rates on 178 items from 28 per cent to 18 per cent, which came into effect on November 15. Experts are anticipating the tax cut to adversely affect revenue for the month of November as well.
Moreover, the government would want to avoid any revenue shortfall as it’s keen to stick to the fiscal deficit roadmap while fostering an economic revival. As per official data, the fiscal deficit was at 96 per cent of its full-year target by the end of October.
According to reports, CBEC has asked field officers to submit a detailed analysis comparing tax payments, before and after GST was imposed, of the top 100 taxpayers in their jurisdictions as the government seeks to understand the reasons for collections slowing. The officials are also learnt to have been authorised to contact the assessees personally or even visit their premises.
The government has also sought information on the input tax credit claimed under the GST regime and compare it with the pre-GST regime to see any abnormal or unusual credit availed now, which could have led to lower tax.
The analysis will also include monthly turnover details before and after GST and explain any variations in collections under the two regimes.
The tax department is also worried over the slow increase in the number of entities that pay taxes monthly, even as ‘eligible taxpayers’ registered on the GSTN have risen during the recent months.
While the taxpayers eligible to pay taxes — except the composition-scheme units that pay nominal taxes without tax credit — increased from about 60 lakh in July to around 80 lakh in October, the number of units that paid taxes hovered around 58 lakh in August and September and by now, the October figure is a little over 50 lakh.