MAHARASHTRA HAS recorded a 26 per cent jump in revenue collection from Goods and Services Tax this year. The state received Rs1.14 lakh crore in revenue from taxes, according to data from the GST department. Of the total revenue, 31 per cent was collected as Value Added Tax (VAT) between April and July, before the GST came into existence. It was the time when dealers were confused and gearing up for the new tax regime.
“We saw a good upside in revenue in these four months as dealers were in a hurry to clear their stocks and inventories. Maharashtra being a state with a strong manufacturing sector, VAT collections were quite high,” state GST Commissioner Rajiv Jalota said.
Between August and March — the GST period of the year — revenues increased by 30 per cent compared to that for the same period the year before. Once GST was rolled out on July 1, new taxpayers were registered. With around 5.5 lakh additional dealers now in the tax net, the department had expected a rise in revenue this year, said sources. “As many more taxpayers got added after the rollout of GST in July, they started adding to the revenue. In the first few months, taxpayers were more compliant and we saw a spike in collections,” said Jalota.
Collections in August 2017 were 51 per cent higher than that in 2016. Tax collections between August and October account for almost a quarter of the total revenue collections. Jalota said that in Maharashtra the consumption of services were quite high, particularly in the entertainment, hospitality, banking and manufacturing sectors. This added to the revenue, he said. An official in the department said that revenues started dropping marginally thereafter as the Union government started announcing relaxations in GST rates. “Until then dealers were careful and compliant. Once there were relaxations, the compliance dropped. It could have been because of confusion or because dealers were not as careful about getting caught anymore,” said the official.
From November, the collections started to drop, only to pick up in January and February when the state received the Integrated Goods and Services Tax (IGST) settlement from the Centre. Maharashtra received around Rs2,300 crore in IGST settlements — almost 15 per cent of the total settlements across the country. Compliance appears to have dropped gradually over the past four to five months. Official data shows that the percentage of dealers filing returns — both GST R1 and GST 3B — dropped steadily after October.
While 94.47 per cent dealers in the state filed their GST 3B returns in July, by February, it has shrunk to 68.58 per cent.
“While we know that the taxpayer base has increased, we don’t know which type of industries have been added and how many are really paying their taxes. This analysis will happen soon and those not complying will be in the net very soon,” said Jalota.