In July 2019, the central and state governments managed to collect the revenue of INR 1,02,083 crore as Goods and Service Tax (GST). Comparatively, it is 5.8% more over the similar month last year, as described from an official.
In the current fiscal, it is the third chance when the combined central and state GST collection crosses INR 1 trillion milestones. There is an agreement between the central and state government if the GST collection of states accounts below a fixed 14% annual growth every year, the union government has the responsibility of compensating shortfall in revenue, within the first five years of GST regime. Collected revenue in July is the result of transactions made in June. In April 2019, the government recorded an annual growth of 10 per cent in GST collection, post which it remains low at 6.6 and 5.8% in subsequent months.
The GST collection of INR 1.02 trillion in July 2019 is the contribution of INR 17,912 crore from the union government, INR 25,008 crore from states, INR 50,612 crore from Integrated GST (IGST) on inter-state sales and INR 8,551 crore from the GST cess. For the revenue shortfall in FY19 and the growth rate remained below 14% till now in FY20, kept the central government busy in compensating states and a question arises how would be the state revenue position will be handled if the trend continues. The average collection of combined central and states was INR 93,114 crore monthly in last fiscal against an INR 1 trillion target of monthly.
In case if this shortfall remained to continue, the union government has to find new resources for compensating states revenue shortfall. Likewise collection from cesses and surcharges on several other taxes.
The Controller General of Accounts (CGA), the governments internal auditor, revealed the total tax revenue of central government in the June quarter registered a growth of 2.7% to collect INR 1.86 trillion as against to similar time duration last year.