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Source: https://goo.gl/i1ay4f           

The Centre compensated states for a shortfall in their goods and services tax (GST) revenue in April-November, enabling states to meet their target for the period.

But the Centre’s own receipts fell short of target, as taxpayers used outstanding tax credits from the previous indirect tax regime to set off part of their central GST liability, a finance ministry statement said on Monday.

GST revenue in a particular month refers to tax paid on transactions in the previous month.

In November, the central and state governments received Rs83,346 crores of revenue for transactions in October, the ministry said, citing figures available till 27 November.

Revenue to states in the August-November period touched Rs157,442 crore, which includes Rs87,238 crore received as state GST, while the remaining was made up by proceeds from inter-state commerce (integrated GST or IGST) and compensation from the union government, according to the finance ministry statement.

In the same period, the union government collected central GST (CGST) of Rs58,556 crore and IGST of Rs26,378 crore totalling Rs84,934 crore.

State governments’ revenue so far in the GST regime has been fully protected, taking into account a 14% estimated revenue growth over the base year of 2015-16, under the agreed formula for making good states’ revenue loss.

The finance ministry attributed the shortfall in union government’s revenue to the overall reduction in tax burden under the new regime that kicked in from 1 July and suspension of some of the key features of the tax reform meant to ensure compliance.

These include matching of invoices, use of e-way bill for tracking movement of goods across states and the ‘reverse charge mechanism’ that places the responsibility of small assessees’ compliance on the big companies that source goods and services from them.

“Since the overall incidence of taxes on most of the commodities have come down under GST, it would naturally have some implication on the revenues of the government,” said the finance ministry statement.

Although 9.6 million tax payers have registered for GST, out of which 1.5 million require to file returns only on a quarterly basis, monthly returns filed for the July-October period ranged between five to six million.

Image source: Hindustan Times
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