GST collections drop sharply, CBEC puts transitional credit under scanner
A sharp decline in the Goods and Services Tax (GST) collections in October has prompted the Central Board of Excise and Customs to assess the businesses’ use of
‘transitional credit’ to pay taxes more critically. The tax rate reductions on some 130 items till October too had an impact on the collections falling to just over Rs
83,000 crore in the month, down about Rs 10,000 crore from the average of the previous three months. The board expects a further decline in November revenue as over 200
items, including 178 that were previously under the highest slab of 28%, saw rate cuts in the middle of the month. While transitional credits on pre-GST taxes paid on
stocks carried over to the GST regime was estimated at around Rs 65,000 crore, the CBEC is ascertaining whether the claims have been on the higher side. These credits
have to be claimed by December, meaning the GST revenue will start having lesser impact of them in the subsequent months. The apparently high transitional claims are
even as the government hasn’t yet allowed ‘TRAN-2’ filings, which allows credits on excise paid earlier without supporting documents but subject to a cap of 60% of the
tax paid.
Read more...
