GST collections drop 5% to Rs 95.4 million in October
NEW DELHI: Collections of goods and services tax (GST) fell more than 5% to Rs 95,380 million in October due to silence domestic demand and shrinking imports .
Although the initial increase in sales due to Navratras helped improve the sweep of Rs 91,916 million rupees collected in September, it remained below the comfort level of Rs 1 lakh crore, which increased the pressure on tax authorities to cover leaks at a time when the Center's fiscal pressure is increasing due to low direct tax collection as well.
GST Collections graphic
The trend lower than expected GST Collections Continuing on a holiday is possibly a reflection of the economic slowdown. As GST is a consumption tax , the lowest collections in recent months are possibly indicative of the decrease in consumer spending, said M S Mani, partner, Deloitte India.
According to all reports, the collections in November are expected to be better since the total impact of the festival season, which includes navratras (which lasted until October) and Diwali, will be visible. “This is the second consecutive month in which the collection is less than the corresponding period last year. Although from April to September 2019, there is still a growth of more than 3% compared to the corresponding period last year, it is constantly decreasing. By November, the collection should be better, given the festivities in October. While with the simplification of compliance and the tightening of administrative measures, collection could improve slightly in the coming months, there is definitely a need for stimulation to stimulate demand, ”said Pratik Jain, partner and leader, Indirect Tax, PwC India.
A large part of the lower collections was on account of poor imports performance as well, again indicating that the economy is working below full potential. During a slowdown, import of raw material, inputs and capital goods drops or sees moderate growth.