GST Council focuses on missing collection target every month

NEW DELHI: Worried about a revenue shortfall, the Goods and Services Tax Council took stock of collections under the new regime, which have missed target every month this financial year except in April, although the average gap has narrowed since last year.

Five northeastern states and Andhra Pradesh were the only states with surplus revenue, while all the others are staring at a shortfall and will have to be compensated by the Centre.

GST collections stood at Rs 93,960 crore in August, less than Rs 96,483 crore in July. Finance minister Arun Jaitley said states faced an average 16% shortfall in GST collections in the year ended March 2018, after it was implemented in July 2017. The deficit narrowed to 13% during April-August in the current financial year, he said.

Mizoram, Arunachal, Manipur, Nagaland, Sikkim and Andhra Pradesh – as consumption states – witnessed a revenue surplus in line with the formula agreed prior to the roll out of GST, which had 2015-16 as the base year with a 14% annual growth rate.

The 10 states with the maximum revenue shortfall during April-August were Puducherry with 42%, Punjab and Himachal Pradesh 36%, Uttarakhand 35%, Jammu & Kashmir 28%, Chhattisgarh 26%, Goa 25%, Odisha 24% and Karnataka and Bihar 20%.

“The state deficit, which we have to neutralise to a zero situation on expiry of fifth year, in the first year was 16%. This year so far it has come down to 13% and I hope it would be a percentage or two less than that by year-end,” Jaitley said.

The Centre released Rs 41,147 crore to the states as GST compensation in 2017-18.

In the current financial year, the Centre paid Rs 14,930 crore to compensate states for revenue losses incurred in June and July, an almost four-fold jump from Rs 3,899 crore paid for April and May.

Asked whether the government would meet the budgeted GST revenue of about Rs 13 lakh, Jaitley said, “Currently, we are in the middle of the year... there is festival season coming... We will try and come as close to the target.”

On the direct taxes side, the government is ahead of target, he said. “Taking it together with the GST collections, I am confident of meeting the fiscal deficit target,” Jaitley said.

The finance ministry set monthly GST collections of Rs 1 lakh crore for this financial year, which has been missed every time, except in April, when it exceeded the target.

Finance secretary Hasmukh Adhia has visited Bihar, Punjab, Himachal Pradesh and Puducherry to analyse the reasons for their GST revenue shortfall and will travel to Uttarakhand on October 5.