FY23 GST collections will exceed the budget estimate; Excise, tough customs targets: CBIC chief

Gross Goods and Services Tax (GST) revenue in FY23 could be 1.3-1.35 trillion rupees per month on average (approximately 16 trillion rupees per year), which could mean the Centre’s GST revenue could be Rs 300-550 billion higher than the budget estimate (BE) of Rs 6.6 trillion, the chairman of the Central Board of Excise and Customs (CBIC) has said. ), Vivek Johri, to FE. Collections will benefit from improved compliance and a rebound in economic activity, he added. However, he does not see much benefit for excise and customs revenue during the year.

The average monthly GST catch-up was Rs 1.23 trillion in FY22.

The FY23 budget factored in average GST collections of Rs 1.2 trillion per month. The States and the Center share the GST proceeds, net of cess, roughly in a ratio of 52:48. Average monthly revenue of 1.3-1.35 trillion rupees would mean gross GST revenue (for Central and States) of 14.4-14.9 trillion rupees (after deduction of cess levies) during of exercise 23.

The additional collection means central GST collections could increase by approximately 20% in FY23, compared to 12% reflected in FY23BE compared to actual collections in FY22 and 16% during fiscal year 22RE.

Collections from CGST amounted to about Rs 5.9 trillion in FY22, up about 30% year-on-year. The robust performance of CGST-assisted total indirect tax collections is expected to increase by 20% year-on-year to over Rs 12.9 trillion in FY22. The indirect tax revenue target for the fiscal year 23 at around 13.3 trillion rupees is a striking distance from the provisional actual figures for fiscal year 22 of 12.9 trillion rupees, as it requires only 3% growth on the year.

“The recovery of the national economy, including the service sector which has been impacted due to Covid and improved compliance, would help keep GST collections buoyant,” Johri said. April, which saw a record number of e-bills, could see monthly collections of around Rs 1.5 trillion, he added.

E-mail bills, considered a proxy for GST collections, amounted to Rs 78.16 million for March, the highest monthly data since the online system was rolled out on April 1, 2018.

However, collection of customs and excise duties will be more difficult as duties have been reduced on many items, the CBEC chairman said. Customs duties were recently reduced on edible oils, some pulses and cotton (Thursday) to cushion the impact of rising commodity prices. Excise duties on petrol and diesel were reduced by Rs 5 and Rs 10, respectively, in November 2021.

Excise duty collection is budgeted at 3.35 trillion rupees for FY23, down 14% from the actual figures of 3.9 trillion rupees for FY22. customs are estimated at 2,130 billion rupees, up 7% year-on-year.

Excise duties (and taxes) are levied as specific taxes, unlike other taxes which are levied on an ad valorem basis.
While the government is banking on the GST to drive overall growth in indirect taxes, the CBIC is now increasingly focused on reviewing returns to verify compliance.

“We have identified approximately 35,000 GSTINs (assigned to business entities) for 2017-18 (first year of GST rollout) based on review risk in the first phase and field trainings are currently conducting the review. exercise,” Johri said. As the year progresses, GSTINs will be identified through analysis of data for fiscal year 2019, he added.

The CBIC seeks consistency in the returns filed by businesses with respect to input supplies, output supplies, input tax credits and tax payments.

“Wherever we find a shortcoming, we will tell taxpayers about it. Income tax payments by these companies will also ultimately be counted,” the official added.
For better compliance in a coordinated manner, the Center is developing a joint strategy with the States. The Group of Ministers (GoM), led by Maharashtra Deputy Chief Minister Ajit Pawar on IT issues, is expected to submit its report soon on how to use data analytics tools to plug leaks and leaks tax.

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