Surge In October GST Collection Due To Increased Economic Activity: CBIC Chairman

New Delhi, Nov 9 (KNN) The increase in Goods and Services Tax (GST) collections for October was primarily a result of heightened economic activity rather than an outcome of tax authorities issuing notices, Central Board of Indirect Taxes and Customs (CBIC) Sanjay Kumar Agarwal said Wednesday.

Speaking at the side-lines of the DPIIT-CII National Conference on Ease of Doing Business, Kumar informed that the department will soon start sending advisories to businesses who are non-compliant in issuing e-invoices to their B2B customers.

“The growth in October GST collections was riding on economic activity and not because of notices that were sent (to online gaming companies) notices were sent because of the time limitation which was coming to an end for the year 2017-18. So it’s not because of that. Also, the notices issued to online gaming companies are in dispute but the growth has come purely on the economic activity which has taken place in the country,” Agarwal said.

In October, GST revenue experienced a 13.4 percent increase, reaching Rs 1.72 lakh crore, marking the second-highest level since the introduction of the indirect tax system. The peak collection in April reached Rs 1.87 lakh crore. Notices have been sent to companies by GST authorities for the underpayment of taxes in the 2017-18 fiscal year, as the deadline for issuing these notices for that fiscal year was September 30, 2023.

“The robust growth in GST revenue from Integrated GST (IGST) on imports, primarily attributed to an increase in imports in comparison to previous months. This surge in imports could be attributed to companies possibly restocking their inventory, or it could be in anticipation of the upcoming festive season,” he said.

On the issue of e-invoices, Agarwal said the department would continue to nudge businesses to issue e-invoices for B2B transactions and will soon send advisories to non-compliant businesses.

“From August 1, businesses with turnover of over Rs 5 crore are required to issue e-invoices. There I would like to mention that those who had to file e-invoices as per law, there the compliance level is not very high. We will be sending advisory to such taxpayers to issue e-invoices. We do not want to adopt an approach which is intimidating, so we want to initially adopt a soft approach and nudge them to issue e-invoices,” he added.

The CBIC has made e-invoice mandatory for businesses in a staggered manner beginning 2020. E-invoicing was initially implemented for large companies with turnover of more than Rs 500 crore, and within 3 years threshold has now been lowered to Rs 5 crore.

(KNN Bureau)