Revenue collections for May from the goods and services tax (GST) have come in at Rs 95,610 crore, of which Rs 31,645 crore will flow into central kitty and Rs 36,683 crore will go to the states.

Collections for April were Rs 94,016 crore while the average for the last fiscal stood at just below Rs 90,000 crore.

The higher-than-average mop-up has been attributed to the effectiveness of the e-way bill system and other enforcement action. Nonetheless, finance secretary Hasmukh Adhia cautioned that the trend was still below Rs 1 lakh crore. Responding to the industry request that the list of items in the 28% list be pruned, Adhia pointed out it was lower than the Rs 50,000 crore per month required to meet the 2018-19 budgetary target.

Speaking at the one-year-of-GST celebrations via video conferencing, Arun Jaitley, who ushered in GST as finance minister, said GST’s impact was already visible in direct tax collections; gross advance tax collections for personal income tax had grown by 44% y-o-y for the April-June period while the corresponding rise for corporate income tax was 17%. “Indirect tax collections for the GST basket of commodities have grown by 11.2% while the buoyancy is at 1.2, which is unheard of for indirect taxes,” he said.

He recounted the trajectory of the GST Council and its decision-making in 27 meetings over the last year. Jaitley said GST had ensured that consumers could now see all the taxes levied on any item unlike earlier when excise tax and applicable cess were always hidden. “The items currently in the 28% slab used to be taxes at 31% pre-GST due to cascading effect but the same was not apparent to consumers,” he said.

Speaking at the celebrations, finance minister Piyush Goyal said the April tax collections of Rs 94,016 crore was music to his ears as historically only about 7% of annual revenues were collected in the first month of the fiscal. “The total collections for the Centre and states could go up to Rs 13 lakh crore for FY 19,” Goyal said. He currently holds charge of the finance ministry in the absence of Arun Jaitley.

Goyal also said GST could be further simplified by allowing composition dealers to file annual return instead of every quarter as is the current practice. Businesses involved in manufacturing and trade with an annual revenue of less than `1.5 crore can opt for a low-compliance regime under GST, which requires payment of only 1% of sales as tax and filing returns quarterly.

Goyal reiterated the need to report businesses that were not issuing bills to consumers and said the government will set up a system for lodging such complaints. “While the majority of traders want to conduct business honestly, some indulge in evading taxes. This gives the dishonest taxpayers a cost advantage which pushes otherwise honest taxpayers to also adopt corrupt practices to remain competitive,” he said.

Representing the businesses, industry association representatives said they hoped that the items currently outside GST — alcohol, real estate, petroleum product and electricity — would be brought in soon as it would rein in inflation. PHD Chambers president Anil Khitai appealed to the industry to shun the practice of using fake invoices for claiming input tax credit. He also urged the finance ministry to remove applicability of GST on exporters as exporters didn’t pay excise in the pre-GST era.

Source :  Financial Express