New Delhi: The shortfall in GST revenue of an estimated Rs 1 trillion has forced the government to revise downwards its gross tax revenue target by over Rs 23,066 crore in the revised estimates of the current financial year despite a better-than-expected collection on the direct tax side.
GST Revenue Shortfall Drags Down Gross Tax Revenue Target By Rs 23,066 Cr
As per the Interim Budget tabled in Parliament on Friday, the government revised the Goods and Services Tax (GST) target from Rs 7.44 trillion to Rs 6.44 trillion -- a gap of Rs 1 trillion -- due to the shortfall in collections.
However, an upward revision of Rs 50,000 crore in estimates for direct taxes to Rs 12 trillion has made up for a significant portion of the shortfall. Total indirect taxes, including Customs and other duties, are estimated to be Rs 10.45 trillion, down from Rs 11.18 trillion.
For Financial Year 2019-20, the government has set a direct tax collection target of Rs 13.8 trillion (up 15 per cent from this year's revised estimates) and indirect tax collection target of Rs 11.7 trillion (up 11.9 per cent).
Last week, the IANS had reported that the government may miss the GST collection target set in the Budget estimates by as much as Rs 1.5 trillion based on collection trends till December.
While GST collection showed a marked improvement in January, it may not be enough to restrict the deficit to Rs 1 trillion. However, the government is confident of meeting this year's as well as next year's targets.
CBIC Chairman Pranab Kumar Das, who assumed charge last month, said with compliance going up and tax net widening, it won't be difficult to meet the revenue targets.
"The very first month after assuming charge on January 1, I have already achieved the target of Rs 1 trillion that I promised before taking over... I have shown this is possible," he said.
"And with compliance going up, and number of taxpayers going up, it is not difficult for us to get this revenue," he added.
Das added that transparency was the key to improve compliance which would play a key role in achieving targets.
"People are interested to take advantage of this compliance level, this transparent system because they benefit if they become a part of the supply chain. So even though they are below the threshold, many of these entities are registering themselves," he said.