Gross goods and services tax (GST) revenues in FY23 may be Rs 1.3-1.35 trillion a month on average (about `16 trillion in the year), which could mean the Centre’s GST revenues could be Rs 300-550 billion more than the budget estimate (BE) of Rs 6.6 trillion, the Central Board of Indirect Taxes and Customs (CBIC) chairman Vivek Johri told FE. The collections will get a boost from improved compliance and rebound in economic activities, he added. However, he doesn’t see much upside on excise and customs duty receipts in the year.
The average monthly GST mop-up was Rs 1.23 trillion in FY22.
The Budget FY23 has factored in average GST colections of Rs 1.2 trillion a month. The states and the Centre share GST proceeds, net of cess, roughly in the ratio of 52:48. Monthly average receipts of Rs 1.3-1.35 trillion would mean gross GST revenues (for Centre and states) of Rs 14.4-14.9 trillion (after deducting cess collections) in FY23.
The extra collection means, the Central GST collections may grow around 20% in FY23 as against 12% factored in FY23BE over the actual collections of FY22 and 16% over FY22RE.
CGST collections stood at about Rs 5.9 trillion in FY22, up about 30% on year. Robust performances of CGST-aided total indirect tax collections to grow by 20% on year to over Rs 12.9 trillion in FY22. The FY23 indirect tax receipts target at about Rs 13.3 trillion is at striking distance from the FY22 provisional actuals of Rs 12.9 trillion, as it requires just 3% growth on year.
“The recovery in the domestic economy, including the services sector that was affected due to Covid and improved compliance, would help maintain the buoyancy in GST collections,” Johri said. April, which saw a record number of e-way bills, could see monthly collections of around Rs 1.5 trillion, he added.
E-way bills, seen as a proxy for GST collections, came in at Rs 78.16 million for March, the highest monthly data since the online system was rolled out on April 1, 2018.
However, customs duty and excise duty collections are going to be more challenging as duties were cut on many items, the CBEC chairman said. Customs duties were cut recently on on edible oils, some pulses and cotton (on Thursday) to cushion the impact of the rise in commodity prices. Excise duty on petrol and diesel were cut by Rs 5 and Rs 10, respectively, in November 2021.
Excise duty collections are budgeted to be Rs 3.35 trillion in FY23, down 14% compared with actuals of Rs 3.9 trillion in FY22. Customs duty receipts are estimated to be Rs 2.13 trillion, up 7% on year.
Excise duties (and cesses) are levied as specific taxes, unlike other taxes which are levied on ad valorem basis.
With the government banking on GST to push overall indirect tax growth, the CBIC is now increasingly focusing on scrutiny of returns to verify compliance.
“We have identified about 35,000 GSTINs (assigned to business entities) for 2017-18 (first year of GST rollout) based on risk for scrutiny in the first phase and field formations are currently doing the exercise,” Johri said. As the year progresses, GSTINs will be identified through data analytics for FY19, he added.
The CBIC is looking for consistency within the returns filed by businesses with regard to input supplies, output supplies, input tax credits and tax payments.
“Wherever we find a gap, we will take it up with tax payers. Income tax payments by these businesses will be tallied at the back-end also,” the official added.
For improved compliance in a coordinated manner, the Centre is working out a joint strategy with states. The group of ministers (GoM), led by Maharastra deputy chief minister Ajit Pawar on IT issues, is expected to shortly submit its report on how to use data analytics tools to plug tax leakages and evasions.
