the essay of 10 July 2024 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p align="left"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">JULY 10, 2024</font></strong></p> <p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GST Collection - The Mystery of the Vanishing Figures</strong></font></p> <p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u>By Vijay Kumar</u></font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> was the GST collection for June 2024? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The Hindu reported it to be </em></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF"><em>about Rs.1.74 lakh crore, according to numbers shared informally by officials. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Business Today</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> reported, </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">For June, GST collections stand at Rs 1.74 lakh crore. This data was not shared in a formal press release but provided to reporters informally. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Business Standard reported, </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">The gross goods and services tax (GST) collection for June 2024 stood at Rs 1.74 trillion, marking 7.7 per cent year-on-year (Y-o-Y) growth, an official source disclosed to Business Standard. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CNBC reported, </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">According to government officials, GST collections stood at Rs.1.74 lakh crore in June 2024. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Print reported: One of the officials said the collections for June 2024 stood at Rs 1.74 lakh crore, which is 7.7 percent higher than was collected in June last year. Neither official from the ministry wished to be named as they are not allowed to officially speak to the media in the pre-budget period. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What can be understood from the above reports and many other news stories? </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The tax collection is </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">reported </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">to be Rs 1.74 lakh crore and the same figure was reported by all those who cared to report the unconfirmed figures from an undisclosed source in the government. Is it some state secret? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. There is no official communication on the actual GST collection for June 2024. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The PIB used to issue a Press Release on the first of every month giving details of GST collection in the previous month. On 1st June 2024, the <u>PIB release</u> stated: </font></p> <blockquote> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">Gross GST revenue collection in May 2024 stands at Rs.1.73 lakh crore: Records 10% y-o-y growth </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">Rs.3.83 lakh crore gross GST revenue collection in FY 2024-25 (till May 2024) records 11.3% y-o-y growth </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">Net Revenue (after refunds) grows 11.6% in FY 2024-25 (till May 2024) </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">Domestic Gross GST Revenue grows 15.3% in May 2024 </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">Posted On: 01 JUN 2024 7:03 PM by PIB Delhi </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"span="span" style="background-color:#F3DBCF">The gross Goods and Services Tax (GST) revenue for the month of May 2024 stood at Rs.1.73 lakh crore. This represents a 10% year-on-year growth, driven by a strong increase in domestic transactions (up 15.3%) and slowing of imports (down 4.3%). After accounting for refunds, the net GST revenue for May 2024 stands at Rs.1.44 lakh crore, reflecting a growth of 6.9% compared to the same period last year. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But on July 1st, while everyone, (not really everyone, only the </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#FFFF00" span="span">concerned </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">people) was celebrating the seven years of GST, the government shied away from disclosing the tax collection figures and it is not as if the collections were shamefully low - they were actually high - to a point of alleged embarrassment. But then why did the government not reveal them publicly and proudly through its PIB? It's like a mystery novel where the clues are hidden in financial reports! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The <em>Indian Express</em> commented: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">Good economic data is rarely considered bad news. But it appears so in the case of indirect tax collections. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">Monthly revenue haul under the Goods and Services Tax (GST) is touching record highs and such a razzle-dazzle has no equal in history. But like beauty that cannot escape malice and envy, GST's prosperity seems to be gathering a hostile glance from taxpayers, businesses and critics alike. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">Perhaps to avert the negative gaze, authorities seem to have decided to give the indirect tax regime an anti-evil eye charm by withholding monthly data dispatches. This may or may not be endowed with special protective powers, but the absence of the monthly collections will likely contain breeding resentment that the government is overtaxing consumers. </font></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Hindu cautiously commented: </font></em></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">Growth in India's gross Goods and Services Tax (GST) collections slowed to a three-year low in June, with revenues rising about 7.74% to about Rs.1.74 lakh crore from Rs.1,61,497 crore collected in the year-earlier period, according to numbers shared informally by officials. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">The Finance Ministry, which generally releases monthly GST revenue collections on the first of every subsequent month, including details about trends on State-wise collections and revenues collected from domestic transactions and imports, had not officially issued any statement on June's indirect tax receipts till the time of going to press on Monday. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">Economists, speaking on condition of anonymity, expressed surprise at the absence of an official statement on the GST revenues for last month, and reckoned this would hamper analysis on activity trends in the economy. </font></p> </blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Money Control stated: </font></em></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">The finance ministry may discontinue the practice of releasing a statement outlining GST collections data on the first day of every month, a source in the know of the matter said, adding that later on the earlier format of the statement, which was detailed, is likely to be replaced with a more succinct version. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#C1DFE8" span="span">GST collection data for July 2024 is Rs 1.74 lakh crore, as per sources on July 1. However, an official statement outlining the mop-up has not been released yet. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Addressing the <em>Centre for Social and Economic Progress</em>, last week, the former Chief Economic Advisor, Arvind Subramanian is reported to have stated: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#ACDFFB">1. In February, the government started releasing net GST collection numbers and has now stopped publishing it again. Because we are not getting refunds data, we are under the impression that revenues are doing very well. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#ACDFFB">2. The focus was on collections, because refunds were not published and we were looking at the wrong number - had the refunds data been published, we would have been much more careful about rate cuts. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#ACDFFB">3. Revenues from the seven-year-old Goods and Services Tax (GST) had not lived up to expectations, having attained pre-GST levels only now, and the objective of a 'Good and Simple Tax' remains elusive. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#ACDFFB">4. You should just have one cess rate, one standard rate and one low rate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#ACDFFB">5. The tweaks and changes effected in the GST regime every time the GST Council meets - this practice was taking the system in a backward direction in terms of simplicity and rationalisation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#ACDFFB">6. Electricity, petroleum and alcohol in the GST net - that would be a bad idea... especially in the current context of the acrimonious relations between the Centre and the States, I don't think it's politically advisable to expect or ask the States to give up more sovereignty. They have compromised but other conditions have changed too much for the compromise to be relevant again. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But is the government obliged to give us the figures of collection every month, the correct figures? What if they choose to reveal them partly and at convenient intervals? Anyway, Arvind Subramanian says, <strong>we were looking at the wrong number</strong>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to a Finance Ministry tweet, GST brought happiness for every home: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As long as your entertainment was limited to a 32 inches tv, you could laugh your way to the bank with a less GST burden; you would have paid less GST for keeping your food and water cool, your clothes clean, your homes cool, your bathwater hot, your food cooked, your clothes sewed and chat your heart on that mobile phone while sipping tea from a cheaper flask and keeping your phone charged with a UPS. </font></p> <p align="center"><img src="http://taxindiaonline.com/RC2/image/stories/JestGST10072024.jpg" width="624" height="624"></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This year, the celebration of the seventh anniversary of GST was a low-key affair. The CBIC Chairman in his newsletter stated: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">Every year Commendation Certificates are conferred to the CBIC officers on the GST Day. Today, Certificates were distributed in a virtual ceremony to 28 deserving officers in recognition of their significant contribution in diverse areas such as trade facilitation, automation, enforcement, audit, infrastructure development, policymaking, etc. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On the <em>'GST Day',</em> the Chairman observed, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"style="background-color:#DFF3CB" span="span">Seven years ago, on this very day, GST was rolled out ushering in a simplified indirect tax regime across India. During this momentous journey, we have witnessed impressive milestones and initiated several trade-friendly measures -an outcome of effective coordination between the Centre and State Governments, extensive consultations with industry stakeholders, and a shared vision of a more efficient tax regime. As we celebrate the seventh anniversary today, let us acknowledge and appreciate the efforts of every stakeholder who has contributed to making GST a success story - from the taxpayers who have embraced GST with open arms to the policymakers who have steered its course, from the tax professionals who have helped in the smooth implementation to the tax administrators who have diligently set the laws and regulations in motion. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Celebrate GST</font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until next week</font></p> </body> </html>