India crosses the trillion mark in tax collection in April, the first time since GST was implemented

• Rs 1 trillion collected from GST in April.
  
• Compliance rate soars up to 69.5%.
  
• New schemes against tax evaders being reviewed like the e-way bill.

For the first time since the rollout of the new tax regime in July 2017, the Goods and Services Tax (GST) collection crossed ₹1 trillion in the month of April. Of the total revenue of ₹1.03 trillion collected in April, ₹186.52 billion was GST collected by the centre, ₹257.04 billion was state collected GST and ₹505.48 billion was integrated GST according to the statement by the finance ministry. In addition to that, the cess was ₹85.54 billion including ₹7.02 billion from imports.

As per the finance minister, the resilience in tax collection could be associated with economic recovery and improvement in compliances.


GST revenue buoyancy is expected to improve during the upcoming months after the electronic tracking of goods movement shows results after its implementation on 1 April 2018. This is expected to be a barrier for tax evaders that keep transactions completely off their books or under-report their profit turnovers.

With the introduction of schemes such as invoice matching with new improved tax return forms, revenue charge mechanism (a mechanism in which large registered dealers have to pay tax for purchases from small unregistered vendors) and the requirement for some taxpayers to withhold tax while making payments, it is expected to improve the tax anti-evasion architecture.

Finance minister Arun Jaitley tweeted, “With the improved economic climate, the introduction of the e-way bill and improved GST compliance, GST collections would continue to show positive trend”.


Compliance to these schemes remains a challenge till date with only around two-thirds of the taxpayers filling in tax returns on time. They have to use a GSTR 3B form, introduced along with the GST in July 2017, which must be filed by everyone who has registered for GST. According to a report, the total number of GSTR 3B filed for March up to 10 April 2018 was ₹6.047 million against ₹8.172 million eligible taxpayers, with the compliance rate standing at 69.5%. A tax of 5.79 billion was paid by 59.3% of the registered composition dealers who filed their quarterly return in April.

“This represents a tipping point in the GST collection in India and indicates that the tax collections are stabilising- it is now essential to allow the reform to stabilise and not keep making constant changes as simplification and stability are essential attributes of increased tax compliance,” said M.S. Mani, a partner at Deloitte India.

The GST Council will meet next via teleconference on May 4, when it is expected to unveil a new and simplified return filing format, which is hoped to increase compliance.