Hyderabad: Highest collection of GST with advance tax

Hyderabad: The Union finance ministry recently boasted about how the GST collection in March 2019 grew by 15 per cent over the revenue in the same month last year.

Finance minister Arun Jaitley announced recently that for the financial month March 19, GST of Rs 1.06 lakh crore was collected, which is a record. However, evidence gathered by this newspaper reveals that a sizeable chunk of the Rs 1.06 lakh crore, which has been shown as GST,  is actually ‘advance tax’ forcibly collected from companies, and that the tax body did not achieve its target.

The Central GST commissionerate based in Telangana state collected around Rs 300 crore as ‘advance tax’ and showed it as GST tax collected in March 2019. From the Hyderabad commissionerate, Rs 47.61 crore was collected in advance and shown as GST for March.

DC has independently accessed records which show that 53 big companies falling under the Hyderabad CGST, including Dr Reddy’s Labs and ITC, paid ‘advance tax’, which was added to make up the Rs 1.06 lakh crore.

On April 1, 2019, Mr Jaitley tweeted, “The record collection in March 2019 of the GST touching Rs 1,06,577 crore indicates the expansion in both manufacturing and consumption.”

The ministry went on to release a report, with figures, stating, “Total Gross GST revenue collected in March 2019 is Rs 1,06,577 crore of which CGST is Rs 20,353 crore, State GST is Rs 27,520 crore, Inter-state GST is Rs 50,418 crore.  The total revenue earned by the Central government and the State governments after regular and provisional settlement in the month of March 2019 is Rs 47,614 crore for CGST and Rs 51,209 crore for the S-GST.” The NDA government, which claims credit for the biggest tax reforms in the country, boasted that in March, a month before the Lok Sabha elections, the collection has been the highest since the inception of GST. A growth of 15.6 per cent was recorded in March 2019 against the revenue in the same month last year.

But, evidence gathered on the ground contradicts this claim.

A highly placed source told this newspaper that, “The GST commissionerates across India were running short of the set targets when compared to other departments such as service tax or central excise and custom. What the government made the commissionerate do is ‘take advantage’. From Hyderabad Zone alone in Telangana state, we got companies to pay a few hundred crores as ‘advance’ which the government boasted of as an achievement, which in reality it is not. With this, the department will fall short of funds in the following year as the companies have paid advances.”   

“Across India, the department was falling short of Rs 1,000 crore. Commissionerates in different states were directed to collect advance tax and that sum was shown as GST collection. Only from TS, Rs 300 crore was collected,” the source added.