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 which is considered to be an impact of the sluggish demand across several sectors.
The numbers, released on the completion of the second year 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 causes a loss of revenue to the government and hence needs to be checked as it affects honest taxpayers. We have nothing against honest traders, but there will be no peace for those generating fake invoices, Anurag Thakur said at the GST Day event.
The government has detected thousands of traders with the help of technology, 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 is reflecting in tax data, stated analyst
Thakur said that the government would meet the GST collection target set for the fiscal year, although tax collections have dipped in June. 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, aerated drinks and coal. The estimated IGST balance has been at Rs 50,000 crore.
During June, Central GST collections were fixed at Rs 18,366 crore, while State GST mop-up was fixed at Rs 25,343 crore, said finance ministry in a statement.
“It is more important than the amount to note that growth is only 4.5% higher than the corresponding period of last year, which should not be larger than the government’s expectations. Growth will be a concern and we should expect some concrete measures in the form of increased audits and inspection 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.
Bureau News, Kokan Now, New Delhi.