Dissatisfied by the low revenue figures under the GST regime, the Central Government is planning to make strategies and entrusted the State to identify the issues with a view to boost the revenue.
Finance Secretary Hasmukh Adhia has started meeting with GST officers, both from central and state tax departments, in the state capitals to understand issues plaguing the GST collections.
There has been a spike in the bi-monthly GST compensation paid to the states by the Centre. The Centre paid Rs 14,930 crore to compensate states for revenue loss incurred in June and July, a nearly four-fold jump compared to Rs 3,899 crore paid for the months of April and May. “A strategy is to be devised to shore up GST revenue. The amount of compensation to be paid to each state varies every month and there is no set pattern,” an official told PTI.
The official said that one of the options being considered is stepping up anti-evasion measures with a focus on top 30 taxpayers, but added that the Centre will ensure that the fix to the problem will not be intrusive on businesses. “Data analytics will be put to use to examine the profile of top 30 taxpayers to study their tax payment pre and post GST implementation,” the official added.
The Government targeted one lakh crore GST collections this year, but the actual mop up has fallen short of the target month after month. The sole exception was the month of April in which the numbers exceeded Rs 1 lakh crore. The collections stood at Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July and Rs 93,960 crore in August. The Centre had agreed to compensate the states for revenue loss on account of GST implementation for a period of five years.
The revenue gap of each State is coming down since July and the average revenue gap of all states for last financial year was around 17 percent, according to the finance ministry. Under GST, a cess is levied on luxury, demerit and sin goods over and above the highest tax rate of 28 percent and the proceeds are utilized to compensate states for revenue loss. On an average, about Rs 8,000 crore is collected every month from this cess.
