Even as 36% of the assessee did not file any returns, the collections under the goods and service tax exceeded both the union and the state government’s expectations and crossed ₹ 92,000 crores. If the numbers are extrapolated from the annual budget, the central government expected that the tax revenue should have been around ₹ 48,000 crores considering a growth of close to 14% in each FY 2016-17 and FY 2017-18. This amount of collections were beyond the expectations of everyone.
The finance minister, Arun Jaitley commented that India had crossed the red line regarding the tax collections and tax targets. He also mentioned that the fiscal deficit target would be too early to comment on as this is going to have a positive impact due to the excellent GST collections.
Now since the estimate of the collections crossed in the first month itself, this shows that the businesses that were earlier not paying have now started filing taxes. He also mentioned that even if the compensation tax amount of ₹ 7,198 crores is kept out, even then the target should surpass provided that all the tax payers filed the GST returns.
The experts have cautioned regarding interpreting the data in the collections as all the assesses could not file the returns due to technical issues in the TRAN forms that are required to claim a tax credit on the pre- GST stocks. If and when these credits are taken or redeemed, the numbers are expected to look way more different than what could be seen right now.
Archit Gupta who is the CEO of the ClearTax said that the companies have been very cautious in filling TRAN 1 since it cannot be amended if it is submitted. TRAN 1 is a business form where the companies are required to report their input tax credit in old returns and input tax credit on various capital goods. The TRAN 1 form can also be used to claim tax return on inventories lying with them till 30th June 2017.
In cases where TRAN 2 form had been submitted the benefit would be passed to the consumers regarding the reduced prices. This caused a lot of confusion among the small and medium enterprises as they could not figure out as to what they were supposed to do with their input credit on their stocks and inventories.
Of the total 7.23 million people who are supposed to pay tax, approximately 5.85 million people till now have migrated to the goods and services tax network (GSTN) while approximately 1.4 million taxpayers are yet to complete the formalities.
Also considering that the other half, i.e., 36% is yet to complete all the compliances regarding the GST; hence the collections are expected to increase in future. From the huge collections reported, the significant chunk has been from the import collections called as IGST, which is expected to be used as an offset. Apart from that, some component of GST is also expected to be used to refund the exporters.
MS Mani, Senior Director from Deloitte has its take on the GST; he said that the aggregate figure of taxes would be difficult to be compared to since it was a bit hard to project the collections at state level VAT, education cess, entertainment tax, etc. He added that the union budget estimates for FY 17-18 an indirect tax collection of approximately ₹ 9.26 lakh crores, which would include collections from non-GST such as excise duty on customs. Taking all these things into consideration, it is an excellent sign for the economy since July in itself is a flat month for businesses in India. The numbers are expected to increase once the festive season starts.
To sum up, as per the press release issued by the government, of the total ₹ 92,283 crores collected, ₹ 7,198 crores was received in the form of cess, which would eventually go to state government as compensation. Of the remaining amount, ₹ 14,894 crores were the CGST, ₹ 22,722 crores as the SGST. Also, huge collections came from IGST amounting to ₹ 47,469 crores out of which ₹ 20,964 were from the imports. The press release also confirmed the allocation of IGST between the CGST and SGST. The allocation would be based on the cross utilization that is expected to be published by the GSTN. This exercise would help know the exact figures for revenue for both the state and the central government.
The press release also confirmed the allocation of IGST between the CGST and SGST. The allocation would be based on the cross utilization that is expected to be published by the GSTN. This exercise would help know the exact figures for revenue for both the state and the central government.
Of the total number of tax payers (72.33 lakh), approximately 58.53 lakh taxpayers have completely migrated and have been absorbed under the GSTN umbrella, and 13.8 lakh are yet to complete all the formalities. As of 29th August 2017, nearly 18.83 lakh new registrations happened on GSTN till 10 AM.