Goods and Services Tax in India Current Update Santosh Dalvi Partner and Deputy National Head Indirect tax, KPMG in India 8 December 2018
Setting the Context 50% increase in unique indirect taxpayers under GST as compared to pre-gst No. of registered taxpayers under GST increased from 72 lakhs in July to more than 1 crore at present Steady improvement in compliance over a period of time from 50.1 lakh returns filed in October 2017 to 67.45 lakh returns in September 2018 Still some way to go to achieve higher compliance rates Budgeted GST collections for 2018-19 INR 13.5 lakh crores Approximately 50% of budgeted collections (ie INR 6.75 lakh crores) collected till October 2018 Balance 50% would have to be collected in next 5 months 2
83,780 84,314 95,633 94,064 93,333 89,825 85,962 92,167 94,016 95,610 103,459 96,483 93,960 94,442 100,710 97,637 GST revenues till October 2018 REVENUE IN INR CRORES J U L - 17 A U G - 17 SEP- 17 O C T - 17 N O V - 17 D E C - 17 J A N - 18 F E B - 18 M A R - 18 APR- 18 M A Y - 18 J U N - 18 J U L - 18 A U G - 18 SEP- 18 O C T - 18 Average monthly GST collections have been in range of INR 93,000 - INR 97,000 crores as against target of more than INR 1 lakh crores Only spike in collection seen due to year end collections (ie March 2018) and festive season (ie September 2018) 3 Source :-PIB Delhi Press Release issued by Ministry of Finance
State GST Collections Overall decline in State GST collections noticed 13% shortfall in average monthly targets (upto June 2018) Puducherry, Himachal Pradesh, Punjab, Karnataka and Jammu & Kashmir had significant shortfall North Eastern states of Manipur, Mizoram and Arunachal Pradesh have collected more than their target revenues Larger states like Maharashtra, Gujarat and Tamil Nadu are on track with their target collections The Centre will compensate any shortfall in target revenues for a period of 5 years, with 14% increase each year 4
Consequences of Shortfall Shortfall in GST collections both at Centre and State levels means Government is all set to miss its fiscal deficit target (of 3.3% of GDP) As a result, any further reduction in tax rates may be postponed Non compliers may face enforcement actions essential to undertake GST audit appropriately 5
The Road Ahead Implementation of proposed amendments Uniformity in Advance Rulings Setting up Centralized Advance Ruling Authority Initiation of GST Audits Anti-profiteering Implementation of new compliance model Expectation on removal of credit restrictions Bringing petrol and related products under GST 6
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