GST tax collections are falling short of expectations
GST collections for May were a bit lower than expected, belying expectations that the uptick seen in April would continue. This is one of the bigger quandaries facing this government. The need to spur economic growth is evident. Lowering indirect tax rates that will result in lower prices for consumers could stoke demand. But when the fiscal deficit position is anyway tight the risk of lower tax revenues may outweigh the benefits. The government needs to find a way to walk this tightrope in the budget.The interim budget had forecast a GST collection target of Rs13.71lakh crore in 2019-20, or a monthly average of Rs1.14 lakh crore. In April, it was at that level but in May it fell short. In fact, the revenue department is asking the government to lower this target to more realistic levels, according to this news report.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.