September GST at Rs 944 billion, continues to be lower than expected

Collection of goods and services tax (GST) stood at Rs 944 billion in September 2018, marginally improving by 0.5 per cent over collections that stood at Rs 940 billion in August.

Year-on-year, GST collections improved 2.5 per cent over September 2017 mop up of Rs 922 billion. The y-o-y growth in August was 3.3 per cent.

This has brought down the average monthly GST collection in 2018-19 marginally, from Rs 967 billion (April - August) to Rs 963 billion (April – September).

Sources in the government pointed to two reasons for the tepid growth in GST collections.

Firstly, the rate reduction for various items in successive council meetings have had a downward impact.
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Secondly, due to explicit political concerns in an election year, the tendency to assess and penalize for non-compliance has reduced.