Contrary to expectations of a revival, Goa’s Goods and Services Tax (GST) collections have turned sluggish.
According to the latest information from the commercial tax department, October revenue from GST is Rs 159 crore from Rs 157 crore in September, indicating a meagre increase of Rs two crore and a drift towards stagnancy.
The number of taxpayers filing returns is also on the decline and currently stands at 62 per cent. It was 81 per cent in August. The state continues to face a shortfall in tax collections with the Centre compensating it for the loss. Total compensation received for July and August is Rs 68 crore.
According to a senior official in the department, the lack of buoyancy is due to the slow collections under the state GST (SGST). He said that the low level of revenue collection is also because a chunk of the taxpayers comprises of small businesses that attract minimal tax rate ranging
from one per cent to five per cent. “Goa has about 24,582 tax assesses under GST but over 91 per cent have a turnover below Rs 1.5 crore,” he said.
In the long run, however, the department expects the GST collections to recover owing to relaxations in penalties, better compliance and stabilization of the online payment system.
Meanwhile, local taxation experts have pointed out that GST collections lack buoyancy because traders are taking the benefit of input tax credit.
According to All Goa Tax Practitioners Association (AGTPA) president Rajendra N Narvekar, “Dealers are setting off their tax liability against input tax credit.” He said that dealers have also become watchful because of the recent reduction in tax rates. “The GST council has reduced the GST rate on several commodities and expectations are of the rates being further tweaked,” he said.
Narvekar pointed out that the full impact of GST collections on revenue collection can only be assessed in the next financial year. “With demand for consumer goods picking up from the dealers’ end, it will need a full production cycle to calculate the shortfall or surplus from GST,” he said.
Since July 2017, the central GST council has initiated several measures to improve compliance among small businesses. This includes hiking the threshold limit under the composition scheme, reduction in the compliance cost and filing of only one tax return. The measures are expected to be beneficial to Goa as a chunk of the taxpayers are in the composition scheme, according to the commercial tax department. To attend to payment difficulties faced by small taxpayers, the department has deployed software engineers from Infosys at the head office to address online glitches.