India’s most powerful tax reform: Goods and Services Tax was implemented effective July 1st, pan-India. Hailed as the ‘Brahamastra’ for Indian business and economics, GST was poised as the ‘game changer’ for India.
The results for the first month collections are out, and technically, it has exceeded expectations, predictions and estimates.
Total of Rs 92,283 crore has been collected via GST by the Income Tax Department, and this news was shared by Finance Minister Arun Jaitley himself.
This is a solid message for the opponents of this tax, who were doubting it’s execution; and a big booster for Govt., which introduced this major tax reform, despite the odds against it.
Minister Jaitley said, “Not many had thought the red line (of adequate revenue following the transition to GST) would be crossed in the first month itself… A more efficient tax system checks evasion,”
GST Collections For First Month Exceed Targets!
Minister Arun Jaitley informed that total of Rs 92,283 crore has been collected as tax revenues under this regime, for the month of July, 2017.
While Central GST revenues was Rs 14,894 crore, State GST revenues was Rs 22,722 crore and Integrated GST was Rs 47,469 crore. Cess receipts, which includes compensation cess from imports was Rs 7198 crore.
Now, as per the Minister, when Goods and Sales Tax was rolled out, the target for revenue collections was Rs 91,000 crore, which has been clearly exceed.
Here is the breakdown of estimated Goods and Sales Tax collection for July:
- State Taxes: Rs 43,000 crore (after assuming 14% increment compared to last year collections)
- Central Taxes: Rs 48,000 crore
He said, “On a sum total basis, we seem to be comfortable. We will have to break up the figures to see if any State has not got (adequate) revenues and the Cess will compensate them.”
Note here, that cess collections needs to be deducted from the figure of Rs 92,283 crore, as it was declared as compensation for states, due to loss in tax revenues after GST implementation.
Besides, fine of Rs 100 per day on taxpayers who haven’t yet filed GST will also boost overall collections.
How Many Filed Returns Under GST?
As per the records shared, the collection for July happened via 64.4% of taxpayers, who were eligible to pay taxes via GST.
Total of 59.57 lakh tax payers were eligible to pay taxes via Goods and Sales Tax in July, out of which 38.38 lakh actually filed returns. Last date for filing GST was August 25th, while it was August 28th for those who decided to avail transitional credits.
However, some tax experts are stating that although collections exceeded Govt.’s internal targets, the actual amount may be somewhat different. Some companies faced technical issues with the ‘TRAN-1’ form which was filled for availing transitional credit.
Do you think that Goods and Sales Tax collections for July is an achievement for the Govt.? Do let us know your opinions, by commenting right here!