Impact of Goods and Services Tax (GST) on Budget 2018-19

Budget 2018-19 is the first union Budget 2018 after the implementation of GST in July 2017. After the implementation most provisions of the Goods and Services Tax (GST) were tweaked and tax rates of numerous products were reduced in subsequent GST council meets which resulted in a sharp decline in government’s tax collection figures.GST replaced more than a dozen indirect taxes; these indirect taxes together formed a bulk of the government's earnings. Service tax alone accounted for more than 14% of the government's revenue in the last Budget in 2017. Thus fall is GST collection is a major cause for concern for the FM.Finance Minister Arun Jaitley who is also the GST Council Chief has stated that Budget 2018 will provide further opportunity for him to address issues related to GST and also to further tweak the GST rates. Almost every sector desires a rate cut in the GST rates but probably only a few of these expectations will be met on the budget day given the precarious fiscal situation that the FM has to deal with.