The GST collection should cross Rs 1 lakh crore because of festive season demand.
New Delhi: The finance ministry expects the GST collections to cross Rs 1 lakh crore in November and December on account of festive season demand and the anti-evasion measures initiated by the revenue department.
The Goods and Services Tax (GST) revenue rose to Rs 94,442 crore in September and officials feel it could surpass the landmark one lakh crore on increased demand during festival season. "With the current trend for GST mop-up, it is expected that the monthly collections could again touch Rs 1 lakh crore around November and December," an official said.
The collections during November and December 2018 would reflect the sales and purchases made during the months of October and November 2018. According to the official, people usually hold back their purchases till Ganesh Chaturthi, which marks the onset of festive season and fell in September this year. Besides, the revenue department's initiative to plug loopholes in the system to curb evasion too would help in raising revenue.
"The GST collection should cross Rs 1 lakh crore because of festive season demand. This is the time when people make purchases and companies offer discounts and come up with promotional offers to boost sales. We expect increase in sales which in turn will result in higher revenues for the government," said Lakshmikumaran & Sridharan Partner L Badri Narayanan.
AMRG & Associates Partner Rajat Mohan said the duo of Indian festivities and wedding season would push the overall demand, temporarily lifting the GST collections for November and December.
"Controlling fiscal deficit with the help of an increase in revenue collection is economically more feasible option than restricting government spending, even if this increase by means of implementing stringent anti-evasion measure," Mohan said.
The finance ministry official, however, has expressed the apprehension that revenues could witness a decline thereafter as sales and purchases usually taper off in the last quarter of fiscal.
The finance ministry has targeted monthly GST collections to be Rs 1 lakh crore for this fiscal, but the actual mop-up has fallen short of the target month after month. The sole exception was the month of April in which the numbers exceeded Rs 1 lakh crore.
The collections stood at Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August and Rs 94,442 crore in September.