Revised and simpler tax return forms as well as lower refunds
will likely boost revenue collection from Goods and Services Tax (GST),
which the government expects to touch to Rs 1.5 lakh crore every month
from the next financial year (2019-20).
“GST collections should be
around Rs 1.5 lakh crore per month from next year. New return form will
also help in tax evasion,” a senior government official told
Moneycontrol.
In addition, the impact of refunds related to transitional credit will also be over, the official said.
The
government has set the target of over Rs 12 lakh crore for the
financial year 2018-19, which can be achieved if the average monthly mop
up is around Rs 1 lakh crore, as compared with Rs 89,885 crore in
2017-18.
The finance ministry releases gross tax collection on the
first day of every month. Refunds that the government has to pay to
taxpayers in the form of input tax credit is not reflected in the data.
“Revenue collection is expected to improve as refunds may go down to Rs 3,000-4000 crore every month,” the official said.
While
the government doesn’t release data related to refunds, it learnt that
it amounts to roughly Rs 5,000-6000 crore every month.
Even as the
GST Council has taken measures against tax evasion such as rollout of
e-way bill and implementation of tax deducted at source (TDS) and tax
collected at source (TCS), the government believes that the new return
filing system will plug revenue leakages.
In its meeting in July,
the Council approved simplified return filing for taxpayers with lesser
details called Sahaj and Sugam and was expected to be made effective
from January, 2019.
The official quoted above said that it may take some more months for the new return filing system to become a reality.
The
IT backbone GSTN had last year had to face harsh criticism from the
businesses owing to massive technical glitches when taxpayers logged in
to file returns.
A failure on the technology front yet again may be disruptive, especially with general election half a year away.
Till
now (April-October), the government has collected Rs 6.78 lakh crore
revenue from GST. Achieving the revenue collection target is crucial as
it has a direct bearing on the fiscal deficit, which is a gap between
government’s revenue and expenditure.
In the last seven months,
tax mop-up has crossed Rs 1 lakh crore twice—in April and October. While
revenue in April was higher as businesses generally pay arrears for
some of the previous months, mop-up in October was Rs 1 lakh crore due
to the onset of the festive season.
Traditionally, government
garners maximum tax during the third quarter (October-September) of any
financial year as consumption picks up substantially during the festive
season.
However, another official in the government official said
that sustained revenue of Rs 1 lakh crore may not be garnered as
integrated GST (IGST) or tax on inter-state supply of goods and services
could witness a dip as imports generally take a hit owing to Chinese
new year.