NEW DELHI GST collections declined to Rs 93,960 crore in August the lowest monthly mop up so far this fiscal as consumers deferred purchase of goods to avail the benefits of cut in tax rate, the Finance Ministry said Saturday.
Goods and Services Tax (GST) revenue for August was the lowest in the five months so far this fiscal. In July the collection was Rs 96,483 crore, in June it was Rs 95,610 crore, in May Rs 94,016 crore and in April Rs 1.03 lakh crore.
However, compliance improved as 67 lakh GSTR-3B or summary sales returns were filed during August, up from 66 lakh filed in July.
The August revenue collections reflect the purchase and sales activities conducted in the month of July.
Explaining reasons for the dip, the ministry said one of the main factors is probable postponement of sale of items for which tax rate was reduced by the GST Council in its meeting on July 21.
The rate cut on 88 items, including sanitary napkins, fridge, small screen TV, washing machine, footwear, among others, was effective July 27. Only 35 items were left in the highest tax bracket of 28 per cent after the latest round of rate cuts.
Since it would have taken some time for the market to pass on the benefit of reduced taxes, consumers would have postponed their decision to buy expecting the benefit. The actual impact of reduction of rate of taxes would be observed only from next month onwards as the rate reduction would have got affected only in last few days of the month, the ministry said.
The GST Council hoped that tax reduction would reduce the cost to the consumers, thereby increase their purchasing capacity and add to the increased consumption in the economy.
Of the Rs 93,960 crore GST collection in August, central GST mop up was Rs 15,303 crore, state GST was Rs 21,154 crore, integrated GST was Rs 49,876 crore (including Rs. 26,512 crore collected on imports) and cess mop up was Rs 7,628 crore.
The total revenue earned by the central government and the state governments after settlement including provisional settlement of Rs 12,000 crore in August, 2018, is Rs 36,963 crore for CGST and Rs 41,136 crore for the SGST.
For the bi-monthly period June-July 2018, compensation of Rs 14,930 crore has been released to the states, the ministry said.
The ministry further said that past trend of indirect tax collection shows that while July collections are 8.2 per cent of the total annual collections, August collections are at a lower level of 7.7 per cent of the total annual collections.
This is another reason for lower (GST) collections during the month of August as compared to that in July, the Ministry said.
GST, which subsumed over a dozen local levies like excise, VAT, service tax, was implemented on July 1, 2017.
Besides, the last date of filing GST returns for July, 2018, in Kerala was extended up to October 5 2018, in view of flood in the state.