The GST collection for this May has crossed Rs 1 trillion for the third time in a row, posting more than 6% growth year-on-year. However, the revenue collection might pose a challenge for Nirmala Sitharaman, the new finance minister, with the Central GST target for the financial year 2019 being 35% higher than the last year.
With the new indirect tax regime, the current GST collection stands at Rs 1 trillion as opposed to Rs 94,016 crore in May last year. The finance ministry released this data on Saturday. However, it was lower than the previous month’s all-time high mop-up of Rs 1.13 trillion.
In spite of a stable collection rate, the government faces a steep Budget target of Rs 6.1 trillion for CGST for FY2019-20. In FY19, CGST collection had dropped 9% short of the revised collection target of Rs 5 trillion, at Rs 4.5 trillion.
The next GST Council meeting under Sitharaman is expected to be in mid-June, which might discuss measures to boost revenue collections. Also, the Council will take up issues such as a uniform tax on GST and lottery on solar projects and e-invoicing.
The stable rate of collection despite recent rate rationalisation is due to the better use of intelligence and introduction of e-way bill system in 2018.
As per the government data, CGST revenues in May this year is at Rs 17,811 crore, SGST at Rs 24,462 crore, and IGST at Rs 49,891 crore (including Rs 24,875 crore collected on imports) and Cess collection at Rs 8,125 crore (including Rs 953 crore collected on imports).
This year in May, a total of 7.24 million GSTR-3B returns were filed compared to 7.21 in April. After the settlement of IGST as a regular settlement and the balance IGST in a 50:50 proportion between the Centre and states temporarily, the CGST remained at Rs 35,909 crore and SGST at Rs 38,900 crore.
Tax evasion may get harder going ahead with the GST Network (GSTN) and the IT office getting into a notice of understanding to encourage the exchange of information between the two. The data trade between the two authorities under the division of income will help grab charge defaulters and dodgers.
The revenue in May this year is 2.21% higher than the monthly average of GST revenue in the financial year 2018-19 (Rs 98,114 crore). The Centre has released Rs 18,934 as GST rewards for the states for February and March 2019.
The GST Council had, in its December 2018, a meeting on GST rates cuts on 23 goods and services such as TV, movie tickets, monitor screens, power banks, and exempted frozen and preserved vegetables from the levy.