Finance Minister Nirmala Sitharaman on July 5 pegged the Goods & Services Tax (GST) collection in the Union Budget at Rs 6.63 lakh crore for FY20, up from last year’s revised collections of Rs 6.43 lakh crore.
The total mop-up from the indirect tax was pegged at over Rs 7.61 lakh crore for 2019-20 in the Interim Budget presented in February.
Finance Minister Nirmala Sitharaman in her maiden budget speech on July 5 said that the centre and states came together and agreed to pool in their sovereign power of taxation for common good of the country.
“17 taxes and 13 cesses became one tax. Multitude of rates instantly became four. Almost all commodities saw rate reduction. Tens of returns were replaced by one. Taxpayer’s interface with tax departments got reduced. Border checks got eliminated. Goods started moving freely across states, which saved time and energy. A truck started doing two trips in the same time in which it was doing one. Thus, dream of one nation, one tax, one market was realised. The GST Council deserves all the credit for this,” the minister said.
The minister said that the government was also working to further simplify the GST processes, for which a simplified single monthly return is being rolled out. Taxpayer having annual turnover of less than 5 crore will file quarterly return.
“Free accounting software for return preparation has been made available to small businesses. A fully automated GST refund module shall be implemented. Multiple tax ledgers for a taxpayer shall be replaced by one,” the minister said.
In the last fiscal, GST collections by the Centre missed the budgeted target by Rs 1 lakh crore.
The government had budgeted to collect over Rs 7.43 lakh crore from GST in 2018-19. However, in the revised estimates, the revenue mop-up has been pegged at over Rs 6.43 lakh crore.
According to the Interim Budget, the government’s target was higher by 18 percent from the revised estimates of this year, but nearly flat compared to Rs 7.43 lakh crore it had set out to achieve when the Budget was presented a year ago.
GST revenue collection for June stood at Rs 99,939 crore. It slipped below Rs 1 lakh crore for the first time since February, when it totalled Rs 97,247 crore. For April and May 2019, the total GST collection stood at Rs 2.1 lakh crore.
Launched on July 1, 2017, GST promised to overhaul India's indirect tax system by consolidating an untidy patchwork of local and central duties such as VAT, central excise and octroi into a single levy, make the tax administration more efficient and turn India into a common national market by removing fiscal barriers among states.
Two years later, it remains a work in progress. Tax collections crossed the Rs 1 lakh crore mark for three months in a row, despite repeated rate cuts, mirroring greater compliance as more businesses in India's bustling unorganised landscape joined the new tax system, which was billed as the biggest structural reforms to be undertaken in independent India.
The new indirect tax regime managed to add about 3.4 million more tax payers to the tax base, a growth of 50 percent compared to the earlier system— a sign of declining tax evasion.
In its last meeting, the GST Council which is headed by Union Finance Minister Nirmala Sitharaman, extended the National Anti-profiteering Authority's (NAA) term by two years, as authorities clamp down on tax dodgers through a system of investigation and penalties.
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