A truck is loaded with goods in the Burrabazar area of Kolkata, India (Photographer: Brent Lewin/Bloomberg)  

GST Collections For July Fall

Goods and services tax collections for July fell over the previous month, partly because rates were lowered on some items.

The revenue from goods and services tax paid for July stood at Rs 93,960 crore, according to a statement of the Ministry of Finance. That compares with Rs 96,483 crore collected in June, Rs 95,610 crore in May, Rs 94,016 crore in April, and Rs 1.03 lakh crore in March.

  • Note: From July-Sept 2017, numbers were updated on Oct 31, 2017; from Nov 2017 to Feb 2018, numbers were released on 24/25/26th of the following month; and from March 2018 till July 2018, numbers were released on the last day of the following month.

The ministry cited delay in sale of items on which GST rate was reduced on July 21—and became effective from July 27—for the dip. “Since it would have taken some time for the market to pass on the benefit of reduced taxes, consumers would have postponed their decision to buy expecting the benefit,” the release said. However, the actual impact of the rate cut would be known only from collections for August, it said.

Abhishek Jain, an indirect tax partner at EY India agreed that the dip was essentially on account of the reduced rate of tax. “With data mining and scrutiny at government’s end, the upward trend should be seen soon.”

The GST Council reduced the tax rate on over 50 goods, including washing machines, refrigerators, vacuum cleaners, paints, ethanol, cosmetics, sanitary napkins.

Krishan Arora, indirect tax partner at Grant Thornton India LLP, however, advised the government to be cautious as the actual impact of the GST rate cut would be known only in September. “[It] may want to look at means to overcome this shortfall over the next few months.”

Compliance improved during the month with taxpayers filing 1 lakh more GSTR-3B returns for July as on Aug. 31. About 66 lakh returns were filed for June as on July 31. The last day for filing summary returns paying tax is 20th day of the succeeding month. Data is released with a lag.

The statement by the ministry detailed the tax collected under various heads.

  • Central goods and services tax: Rs 15,303 crore.
  • State goods and services tax: Rs 21,154 crore
  • Integrated goods and services tax: Rs 49,876 crore (includes Rs 26,512 crore collected on imports)
  • Compensation cess: Rs 7,628 crore

Settlement of IGST revenue in July added Rs 41,136 crore to CGST and Rs 36,963 crore to SGST, the statement said. A provisional settlement of Rs 12,000 crore was done among state and central government from the IGST account.

The central government compensated states with Rs 14,930 crore for the losses they incurred in June and July.