NEW DELHI: The Centre is staring at a Rs 50,000-crore shortfall in goods and services tax collections in 2017-18, but is hoping to more than make up by budgeting a 67% jump in collections in 2018-19 which may help cut rates ahead of the 2019 elections.
The FM said one reason for the shortfall was the Centre will collect indirect taxes only for 11months in the current fiscal.
A part of GST paid in March will be credited in April and will be shown as revenue accrued in 2018-19. Lower than-estimated collections have been a factor for the Centre missing the fiscal deficit target of 3.2% of GDP and close the year with 3.5%.
Though GST rates have been cut for over 200 items since its introduction on July 1, key reasons for revenue slippage was the GST Council‘s call to suspend anti-evasion steps like matching invoices of buyers and sellers and the reverse charge mechanism to keep tabs on unregistered businesses. Rollout of e-way bills was deferred till February 1.
The Centre also has to compensate states if growth in collections is less than 14%. It is hoping GST regime will stabilise soon and with a bigger base of taxpayers along with anti-evasion measures revenues will start growing much faster in 2018-19. It has projected over 60% rise in tax revenues in the next fiscal year.