Rs 1.7 Lakh Crore Average Monthly GST Collection May Be The Norm In FY25: CBIC Chairman

Budget 2024 had no major direct or indirect tax changes, as the government stuck to its word in terms of "no spectacular announcements" on the tax front.

The opportunity, however, was useful for the Finance Ministry to include a few items in the Finance Bill, which had already received the approval of the Goods and Services Tax Council in its 52nd meeting.

These include mandating the input service distribution mechanism for the distribution of input credits procured by the head office to branch offices. Registration of packing machines used in the tobacco industry on the common portal will also be required henceforth—another matter that the GST Group of Ministers looking into the tobacco industry had recommended to the GST Council.

"...another section has been inserted in the GST law, which is Section 122 A. And, in case they (companies) fail to register the machine on the common portal, provision has been made for the imposition of a penalty of Rs 1 lakh per machine and the machine can be seized and subsequently confiscated," CBIC Chairman Sanjay Kumar Agarwal told NDTV Profit.

The GST average monthly collections till January in FY24 stood at Rs 1.6 lakh crore, establishing a new baseline for the department.

"I would like to mention that in the current financial year, the GST collections are very robust. There is very healthy growth and in three months, the gross GST collections figure has crossed the mark of Rs 1.7 lakh crore, and in January it was Rs 1.74 lakh crore. That is the second highest GST collection ever," Agarwal told NDTV Profit.

This gives the department confidence that the year will close on a collection milestone, he said.

In terms of a new baseline for average monthly collections in FY25, he said, "...in this current financial year, the average monthly collection of GST is Rs 1.67 lakh crore. So, we are expecting it to be Rs 1.7 lakh crore every month and that may become the norm in the next fiscal," he said.

The department's collection is also buoyed by new sources of revenue, such as from the online gaming industry. In 2023, the department also levied a 28% GST—the highest tax slab—on the total deposits at the point of entry for online gaming.

"I’m happy to tell you that after new provisions come into effect on Oct. 1, 2023, there is a robust growth in revenue for online gaming companies. In fact, it has gone up 400%, or four times. Online gaming companies are doing very well, and the GST revenue collections have also gone up tremendously from the sector," Agarwal said.

"Prior to the amendments, on average, collections were around Rs 370 crore. Now, it has gone up to Rs 1,850 crore… So there is a huge jump in revenue collection from online gaming companies," the CBIC chairman said.

On the issue of a spate of GST notices, Agarwal said that the department is examining cases where the sectors have approached the department for recourse.

"There were bunching of time limits for issuance of show cause notices for FY18, FY19 and FY20. And because of the time limit coming to a close, the notices had to be issued within the time limit for FY18 and the adjudication was also to be completed. That’s why you might have seen notices issued to the taxpayers," he said.

The chairman also added that in some cases, where notices have been issued, the department has noticed mismatches in return filing or taxpayers not paying tax in accordance with the provisions of the law and similar infractions.

"I can tell you that less than 1% of taxpayers are selected for scrutiny or audit. So, the numbers cannot be very large... Some of the sectors have taken it up with us and (the) matters are also under examination," he said.