DNA Money Edit: Higher GST mop-up to reduce shortfall

Goods and Services Tax (GST), which got off to a bumpy start in July 2017, is steadily gaining ground. After a series of technical glitches during the launch and frequent rate tweaks since then, GST collections were struggling to reach their monthly targets, and nearly threw the government's revenue targets into a tailspin. But buoyed by a pick-up in consumption during the festival season, GST collections in October have crossed the Rs 1 lakh crore (trillion) psychological mark, bringing cheer to the government. This will surely provide respite to a government fighting to reach its fiscal deficit target. An elated Arun Jaitley was quick to tweet that the success of GST is lower rates, lesser evasion, higher compliance, only one tax and negligible interference by taxation authorities.

This is the second month of the fiscal that collections have crossed the magic figure after April. The growth in collections stem from the stabilised GST processes and the anti-evasion measures initiated by the government. Of course, the fact that September is the beginning of the festive season has helped. Even if one were to discount the previous fiscal's closing adjustments that would have helped the upsurge in September, many believe that the trend is likely to continue with implementation of anti-evasion measures.

With the increased tax base and better compliance, tax collections are expected to improve in the coming months. However, the FY19 target of Rs 12.9 trillion looks a tad difficult.