The government has asked state GST commissioners to come up with suggestions to perk up tax collection by December 6, Revenue Secretary Ajay Bhushan Pandey said.
In an exclusive interview with CNBC-TV18's Timsy Jaipuria, Pandey said the government wanted to approach the Council with feasible suggestions to augment revenue collections. GST collections crossed the Rs 1 lakh crore mark in November after a gap of three months, thanks to festival season demand.
The GST Council is set to meet on December 18. It is expected to review the existing tax structure and compensation cess rates as part of a larger exercise to boost revenue.
“The government is on course to meet the direct tax collection target. With the third and fourth quarters coming, the direct tax collections will pick up,” Pandey pointed out.
Edited excerpts from the interview: Q. With the GST collections in November scaling Rs 1 lakh crore again, does it mean the declining GST collections have been arrested? A: November GST collections have shown a reversal in the declining trend. We are hopeful that the collections will continue to grow but we will have to watch for a few more months before we describe it a trend.
Declining imports are pulling down the overall collections. IGST and compensation cess on imports have been down because of the overall decline in imports.
As of now, the government is hopeful of meeting its budget targets for GST. We are taking a number of measures to improve the compliance further.
ALSO READ: GST dues: 6 state finance ministers say embarrassed to beg before central govt Q. What do you think are the main challenges to meet the overall indirect tax collection target set in the budget? A: As I said, the declining trend in imports is pulling down the collections in the levies which are applicable on imports. For example, collections of IGST and compensation cess on imports have been lower. Similarly, custom duties collections have been impacted because of reduced imports. Q. A lot has been talked about compliance but when it comes to measures to augment revenue collections, not much has been seen on the ground. What are the measures that the government is looking at to adopt now in this regard? A: A lot has been done to improve compliance. The government has seen record-high return filing in November.
When it comes to the system and architecture of GST, it is stable and working fine. When it comes to other measures to augment revenue collections, the Council has recently written to state commissioners, across states and UTs, on November 27, asking them to give their suggestions/inputs/proposals with regard to the measures on compliance and rates, etc., to augment revenue.
They have been asked to submit their inputs/proposals to the Centre by December 6. The suggestions so made shall be placed before the Committee of Officers for immediate examination.
They have also been asked to make specific suggestions on review of items currently under exemption, GST and compensation cess rates for various items, and rate calibration for addressing the inverted duty structure, etc. This discussion is significant in view of lower GST and compensation cess collections in the last few months. The compensation requirements have increased significantly and are unlikely to be met from the compensation cess being collected. Once these suggestions come to the officers’ committee, it will be examined and suitably presented to the GST Council for their direction. Q. Apart from this, when it comes to direct taxes, the collection is going very slow. The budget had set a daunting target of Rs 13.35 lakh crore of direct tax collections. How hopeful are you of meeting this target? A: The government is on course to meet the direct tax collections target. With the third and fourth quarters coming, the direct tax collections will pick up.
When it comes to the estimated target of the budget minus the shortfall on account of corporate tax rate cuts, we are working on the remaining target (Rs 11.90 lakh crore) as of now.
According to the latest data, that is the collections during April to November 2019, personal income tax collections for April-November 2019 stands at Rs 3.13 lakh crore versus Rs 2.90 lakh crore during same period last year.
Corporate tax collections as of April-November 2019 stand at Rs 3.89 lakh crore versus Rs 3.72 lakh crore during same period last year.
The direct tax department is also working speedily on expediting refunds, as per the directions of the PM. As of April-November 2019, the direct tax department has sanctioned Rs 1.46 lakh crore refunds versus Rs 1.19 lakh crore during the same period last year, which is quite significant.Around 68 percent of the refunds were issued within 30 days of the filing of the return. Corporates alone have got over Rs 1 lakh crore of refunds this year.