India: 14% shortfall likely in direct tax mop-up

  • Collection of direct tax for the just-concluded fiscal 2020 is expected at INR10.1tr, well short of the government’s most recent estimate of INR11.7tr, officials in the know said.
  • The near-14% shortfall, or about INR1.6tr, from the revised target is partly because of the ongoing lockdown, which is going to weigh on 1Q20 collections. The government had collected INR10.34tr in direct taxes.
  • Though collections for the last couple of days of FY20 are yet to be accounted for, the total would still be well short of the revised target, according to an official who asked not to be named.
  • The government’s goods and services tax collections fell below the INR1tr-mark after four months. GST collections for Feb 20, collected in Mar 20, was INR976.0bn against INR1.05tr in Jan 20, according to a statement by the Ministry of Finance.
  • This came even as India restricted input tax credit—what businesses get for paying taxes on inputs—to the extent of 10% of eligible credit if all invoices are uploaded by the taxpayers’ suppliers from Jan 20.
  • The government is increasingly looking to check GST evasion as poor tax compliance adds to its revenue collection woes amid a broader slowdown in the economy.
  • Still, total gross GST collections for FY20 ended 31 Mar 20 at INR12.22tr were higher than the revised target of INR11.26tr, according to BloombergQuint’s calculations.
  • The finance ministry, in Union Budget 2020-21, had lowered the GST collection target from INR12.17tr.
  • However, out of the government’s budgeted GST revenue of INR6.12tr, it has collected about INR5.46tr, according to official data. This includes CGST, the centre’s share of IGST and GST compensation cess.

External Link : https://economictimes.indiatimes.com/news/economy/finance/14-shortfall-likely-in-direct-tax-mop-up/articleshow/74923760.cms

External Link : https://www.bloombergquint.com/gst/gst-collections-fall-below-rs-1-lakh-crore-mark-after-four-months

1-Apr-2020


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