Amid muted Goods and Services Tax (GST) collections, the State Bank of India (SBI) Research in its latest report has projected that the GST collections will grow in the range of 14-16% during the fiscal year 2018-19 (FY19), similar to the decadal gross tax revenue growth rate at 13.9%. Besides, it described recent speculation on GST collection targets for the current and next fiscals as being ‘overtly aggressive’. It added that the speculative collection target pegged at Rs 7.4 lakh crore which is 67% higher than the revised estimates (RE) for the financial year 2017-18.
The SBI Ecowrap report titled ‘The Arithmetic of GST Collections’ has noted that GST receipts during the current fiscal (FY18) will only be for 9 months as the new indirect tax regime was implemented from July, and factoring in the assumption that Integrated GST (IGST) should be equally shared between the Centre and states.
Citing the wild speculation in the public domain that the IGST figures are taken in their entirety without separating the share of the states, it said that this is wrong, as the data of GST collections show that gross IGST collections are going to touch around Rs 4.01 lakh crore in FY18, of which 60% has been transferred to states and rest Rs 1.61 lakh crore are shown in FY18 revised estimates. However, IGST collections of Rs 4.01 lakh crore should be equally split between the Centre and states. It added that if that happens, then the extra 10% will get transferred to the Centre leading to upward revision of FY18 estimates.
SBI Research has projected that the India’s gross tax revenue will grow by 16.7% in the next fiscal to Rs 19.1 lakh crore, on the back of a 10.2% growth in corporation tax and 20.4% rise in personal income tax. Thus, it added that the government’s FY19 revenue targets are reasonable.