FinMin to adopt cash basis accounting to collect GST
New Delhi: In a bid to bridge the lag in actual revenue accrual, the Finance Ministry will from this fiscal shift to cash basis accounting for the Goods and Services Tax (GST) where monthly collections will be reported on the first working day of the following month.
Till now, monthly tax returns under GST, which has amalgamated 17 central and state taxes into one, were allowed to be filed by the 20th of the following month and revenues collected were reported on 26th -- almost a month-long lag between collections and their reporting.
This had led to a situation wherein the government was able to collect tax revenue for one month less in the first year of GST rollout.
To overcome this, GST collections for the month of April will be reported on actual basis on May 1, officials said.
Technically, GST collections of March should have been reported this week. But to enable a switchover to the cash-basis accounting, only the Integrated-GST -- which is levied on inter-state movement of goods as well as imports -- will be shown in March tax collection. This amount is about Rs 20,000 crore, an official said.
The March collection of Central GST (C-GST) and State GST (S-GST) would be reflected in April data which would be made public on May 1, he said.
So, the April numbers, which will be released on May 1, would be highly inflated as it would contain the collections made in April as well as CGST and SGST collections of March. From May onwards, the monthly collections of CGST, IGST and SGST would be reported on June 1.
"Moving to cash basis accounting and reporting the amount of tax received in a particular month immediately after the month end will reflect better accounting position for the GST collections," the official said.
The official said the Finance Ministry will in a day or two come out with the month-wise GST collection data for the entire 2017-18 fiscal and for the month of March it will only account for IGST revenues of about Rs 20,000 crore collected during the month.