The Union government has estimated the monthly GST collection at over Rs 1.2 lakh crore, said Central Board of Indirect Taxes and Customs (CBIC) chairman Vivek Johri on Saturday. He added that there's a need for the GST council to deliberate bringing petroleum products under the ambit of GST.
"The major concern states have had in the past is the adverse impact on their revenue," he told TOI. "All states levy VAT on sale of petroleum products, which are not under GST. This apprehension was strong in the initial phases of GST, because the revenue string that people expected from GST did not materialise, and then the picture got complicated because of Covid.
He said that there was apprehension that it would impact states' revenue. "They did not want to lose independence either," he said.
"But as GST revenue collection improved, I think it is quite natural that the positions of states will soften on inclusion of petroleum products within GST. The advantages to industry and overall logistics and transport sector are quite evident, because if you bring petroleum products under GST, there will be free flow of ITC within that value chain. So that is a very positive impact which it will have on the petroleum industry. If there is some possibility of reducing costs because of the availability of ITC of the tax paid on goods and services which the petroleum industry consumes, it will naturally benefit the entire economy in terms of lower costs."
He said that as far as the apprehension about loss of revenue is concerned, if one looks around the world, what most countries do is that over and above the GST, they levy some sort of tax which could either be an excise duty, VAT or perhaps sales tax, on the sale of petroleum products.
"With increasing awareness about the environment, people are now viewing these as carbon taxes also," Johri said. "It is possible to make up the perceived loss in revenue by suitably calibrating the excise duty or sale tax or any other form of tax that you levy on petroleum products over and above the GST. I don't think there is any set time frame, as the constitutional mandate itself says that the council has to make a recommendation. This issue will require a lot of discussion in the GST council and a decision will be taken by consensus."
Responding to whether monthly GST collections will see a decline as the economy slows down, he exuded confidence that it will definitely stay above Rs 1 lakh crore mark.
"In fact, now we are looking at a much higher monthly average, which could be in the range of Rs 1.25-1.3 lakh crore, mainly for two reasons, one is the revival of the economy. You would have noticed that Goa is such a big centre for the tourism industry for travel, and that the services sector has also bounced back after Covid. There is good economic activity happening in some of the sectors that were badly affected by Covid. That is a very positive development, which will contribute to better revenue collection."
The senior IRS official also said that they would wait for the group of ministers' report on levying 28% GST on gambling and betting, following which the GST council will take an appropriate decision.
"The GoM has deliberated on two issues relating to the gaming industry, casinos, lotteries, etc - the rate issue, and at what value the rate should be charged," he said. "We have not yet received the recommendation of the GoM. Particularly with respect to casinos, the demand is that it should be charged only on the token value minus the winning charges, which is the margin the casinos make in their business. Currently, the provision is that it should be charged on the full value of the token, which is the point of contention."
When asked about the revenue the Centre and state would earn through GST on gambling and casinos, he said, "In Goa alone, the collection would be around Rs 1,000-1,500 crore a year, which is quite a substantial part of the revenue the Goa Government earns. But online gaming is another very big prizing industry, and the revenue from lotteries is likely to be quite substantial. Currently, the rate is 28%."
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