Indian two thousand rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Making Sense Of The Rs 7.19 Lakh Crore GST Collection 

The government collected an average monthly Goods and Services Tax of Rs 89,885 crore in the August to March period.

The total revenue collected under the new nationwide sales tax during this time was Rs 7.19 lakh crore, the finance ministry said in a statement today.

Making Sense Of The Rs 7.19 Lakh Crore GST Collection 

Also read: GST: No Decision Yet On Simplification Of Returns Filing Process

The Central GST mop-up stood at Rs 1.19 lakh crore while State GST amounted to Rs 1.72 lakh crore. Why are the two numbers different if the rate of tax is the same? That’s because a lot of transition credit from the erstwhile service tax and excise regime has been used for the payment of CGST, Badri Narayanan, partner at Lakshmikumaran & Sridharan explained.

The other important number is the Integrated GST collection of Rs 3.66 lakh crore. IGST is levied on all inter-state supplies of goods and services, he said. This should have ideally been divided equally between the Centre and the states but states have got only Rs 1.19 lakh crore; there’s a gap of about Rs 0.6 lakh crore, Badri pointed out.

This amount is in the Centre’s kitty and has not devolved to the states. This will ultimately come to the states once the allocation happens over a period of time. This will depend on when the transactions end with the final consumer. As the goods travel through the supply-chain and over the next few months complete the chain, these numbers will keep getting adjusted against state taxes. 
Badri Narayanan, Partner, Lakshmikumaran & Sridharan

Of the total Rs 7.19 lakh crore collected, the CGST collection is to the tune of of Rs 3.86 lakh crore. This is a sum of Rs 1.19 lakh crore of CGST + Rs 2.47 lakh crore of IGST after settlement + compensation cess of Rs 20,874 crore after distributing to states. The SGST receipt stands at Rs 3.32 lakh crore.

Making Sense Of The Rs 7.19 Lakh Crore GST Collection 

Also read: Finance Ministry To Move To Cash Basis Accounting For GST Collection

Interestingly, in this year’s Union Budget, the finance minister had issued revised estimates for 2017-18 – CGST at Rs 2.21 lakh crore, IGST at Rs 1.61 lakh crore and compensation cess at Rs 61,331 crore.

Making Sense Of The Rs 7.19 Lakh Crore GST Collection 

Compare the budget estimates of 2018-19 to the revised estimates of 2017-18 and you’ll see that the government expects a 173 percent increase in the CGST collection, 47 percent increase in compensation cess and 69 percent decline in net IGST collection, Jigar Doshi, partner at tax consultancy firm SKP Group pointed out. The dip in estimated IGST collection can be attributed to the compensation that’ll need to be given to states, Doshi added.

Given the above forecast and expectations, it appears that the government expects an increase in compliance levels, and an increase in GST collections from assessees due to defaults, assessments and anti-profiteering.
Jigar Doshi, Partner, SKP Group

Despite the detailed nature of GST compliance, the response of India Inc. has been quite mediocre. The average number of returns filed within the due date has increased to 65 percent in March 2018 from 55 percent in July 2017, Doshi added.