NEW DELHI: Goods and services tax (GST) collections dipped below the Rs 1 lakh crore mark in June for the first time in the current fiscal in what is seen as an impact of the sluggish demand across several sectors, with tax consultants also blaming evasion for the drop in the mop-up.
The numbers, released on the second anniversary of the indirect tax reform measure, coincided with a government warning to evaders, especially those generating bogus invoices to make fraudulent claims. “The menace of fake invoices needs to be checked as it affects honest taxpayers and causes a loss of revenue to the government. Imaandaar traders se bair nahin, fake invoice waalon ki khair nahin (we have nothing against honest traders, but there will no peace for those generating fake invoices),” junior finance minister Anurag Thakur said at the GST Day event.
‘Expect increased audit and scrutiny over next few months’
Using technology, the government has detected thousands of traders, many of whom were using shell companies to generate fake invoices and claim tax credits and refunds. Sales of durables and cars as well as consumer goods have taken a beating in recent months, which analysts said is reflecting in tax data.
Although tax collections have dipped in June, Thakur said the government would meet the GST collection target set for the fiscal year. During 2019-20, the government is targeting to collect Rs 6.1 lakh crore through Central GST and a shade over Rs 1 lakh crore via compensation cess on luxury and sin goods such as cars, tobacco, aereated drinks and coal. The IGST balance has been estimated at Rs 50,000 crore.
During June, Central GST collections were pegged at Rs 18,366 crore, while State GST mop-up was pegged at Rs 25,343 crore, the finance ministry said in a statement.
“More than the amount, it’s important to note that it (growth) is only 4.5% higher than the corresponding period of last year, which should be below the government’s expectations… (it) will be a concern and we should expect some tangible measures in the form of increased audits and scrutiny over the next few months. In addition, the government may explore options as to how consumers can be incentivized to be more vigilant on tax compliance,” said Pratik Jain, partner at PwC India.
EY tax-partner Abhishek Jain said the steps planned by the government in the coming days — such as upgradation of e-way bills and launch of e-invoicing — will help check evasion even as revenue secretary Ajay Bhushan Pandey promised more reforms in the coming months.
Source : https://timesofindia.indiatimes.com/business/india-business/gst-collections-dip-below-rs-1-lakh-crore-in-june/articleshow/70032902.cms