As the Indian economy is reeling under pressure, here is another bad news, which is likely to aggravate the condition further. The Good and Services Tax (GST) collection in its second month since launch reportedly shrunk by 3.6 percent or Rs 3,394 crore.
In August, the government collected Rs 90,669 crore GST, as against July's collection of Rs 94,063 crore. The collection is even lower than the centre's estimated monthly budget of Rs 91,000 crore, Business Standard reported.
In August, assesses paid taxes also dropped by around nine percent. Reports indicate that 55 percent of assesses paid taxes for August, compared to 64 percent for July.
In August, about Rs 14,402 crore was collected from the Central GST (CGST) against Rs 14,894 crore in July and Rs 21,067 from State GST (SGST), against Rs 22,722 crore in the previous month. And Rs 47,377 crore has been collected from Integrated GST (IGST), BS reported.
Of the Rs 95,000 crore in GST collections in the first month following its implementation, taxpayers have claimed Rs 65,000 as transitional credit, but the government said only Rs 12,000 crore of claims were valid.
"The alarming fact which emerges is with respect to the level of compliance for the month of August. It appears that 45 percent of the assesses have still not filed returns (against 35 percent for July). The government should go to the root cause and analyse whether these assesses are facing some genuine problems or they have been migrated automatically and are not required to comply," the business daily quoted Abhishek Rastogi of Khaitan & Co as saying
Experts believe that ideally, the tax figures in August should be more than July as there were more returns filed last month, but hope that those collections may come later. Experts said the worrying part is compliance, as of the 5.95 million registrations under the GST in July, only 3.83 million filed returns as of August 29.
"The collection has dipped marginally as assesses start to utilise their transitional credit. As industry settles down to the GST law and compliance, a more realistic collection figure will be seen in the coming months," BS quoted Bipin Sapra of EY.
