Finance Minister resets GST collection target upward for January, February; expects to get ₹10,000 crore more

The Government on Friday increased the GST collection targets for January and February by ₹10,000 crore. However, there is no change for the March target.

If higher revenues are realised, it would give some relief to Finance Minister Nirmala Sitharaman on the fiscal deficit front.

The fiscal deficit has already exceeded budget estimate of over ₹7 lakh-crore and with lower than expected revenue from tax as well as from disinvestment, the deficit is expected to widen further and it might be revised by at least 20 basis points (100 basis points are 1 percentage point) for the current fiscal year to 3.5 per cent of GDP.

According to sources in the Finance Ministry, Revenue Secretary Ajay Bhushan Pandey held a meeting with officials where it was decided to revise “revenue collection aim for GST to ₹1.15-lakh crore for each of next two months (January and February) and ₹1.25-lakh crore for the last month of this financial year with specific focus on fraudulent input tax credit (ITC) claims as found in data analytics review.”

Last month, the government had revised the targets for January and February to ₹1.10-lakh crore each.

However experts are sceptical.

Parag Mehta, Partner, Indirect Tax at NA Shah Associates, said that considering the sluggish economy, it is an ambitious target. Even during the festive period of Diwali, the collections could touch only ₹1-lakh crore.

Further, the GST Department has been instructed to aggressively use the data analytics features of the GSTN system. The department plans to intensify its collection efforts in the next 2-3 months, using advanced tracking measures to track GST evaders. Most of the information is available with the authorities at the click of a button.

“The only cause of concern is that businessmen and traders should not be harassed to ensure that the targets are meet. The department has to ensure that regular traders with genuine difficulties are not hassled by these measures,” he said.

Meanwhile, the meeting was attended by all senior officials of CBIC (Central Board of Indirect Taxes and Customs, the policy making body for indirect taxes) and CBDT (Central Board of Direct taxes, the apex policy making body for direct taxes) to strategise action plan and make the field functions more efficient to achieve the collection aims without any overreach.

According to sources, it is learnt that GST authorities would look into the mismatch of supply and purchase invoices, data analytics of mismatch in return forms such as GSTR-1, GSTR-2A and GSTR-3B, failure of filing returns, over invoicing, recuperation of fake or excess refunds availed beyond the permissible limits, patching the tax leakages, action on checking fake or huge ITC claims, data analytic review of all the refund under inverted duty structure, etc.

The sources said that SMSs and emails will be sent to all such fraudulent or excess ITC claimants, targeted at defaulters, non-filers and those who provide mismatched information in their returns or over invoice or who have been identified through data analytics for tax evasion by duping the system through rogue modus operandi.

Taxpayers who have taken ITC wrongfully can voluntarily repay amount equal to inadmissible credit before verification and punitive action is taken against them.

Electronic communications to such identified targeted taxpayers and fraudulent refund seekers and over-invoice users would be followed by visits from the GST field formations to make them abide the law and pay due taxes in time. The field formations would be required to report on daily basis.

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