Indirect tax collections are likely to fall short by Rs 90,000 crore in the current fiscal on account of subdued GST mop-up and excise duty cut on petroleum products, an SBI research report said Thursday.
According to the Budget Estimate, the government proposed to mop up Rs 7.4 lakh crore from the goods and services tax (GST) and Rs 2.6 lakh crore from Union excise duties.
Excise duty was subsumed under GST, except on petroleum items and liquor & alcoholic products used for human consumption.
“We expect a shortfall of around Rs 90,000 crore in GST and excise collections, out of which Rs 10,500 crore is on account of reduction of excise duty on petroleum products by Rs 1.50 per litre,” said SBI Ecowrap report.
Total GST collections come at Rs 6.78 lakh crore as compared with the 2018-19 Budget Estimate of Rs 7.44 lakh crore, including SGST and IGST. “If we exclude SGST and proceeds of IGST contributed to states, the GST collection of the Centre comes to Rs 3.46 lakh crore (47 per cent of BE),” the report said.
However, it added that customs collections may overshoot the budgeted amount (Rs 1.12 lakh crore) by Rs 14,000 crore.
The report further said that for the second year in succession, direct tax collections are likely to be higher than the budgeted targets by at least around Rs 20,000 crore. In addition to this, the government is expected to add another Rs 20,000 crore to its kitty from evaded taxes.
As per the report, the recent decline in oil prices might compress the current account deficit (CAD) by around USD 5-6 billion from “our estimates of USD 78 billion in current fiscal”.
“This will imply CAD settling down at 2.6 per cent of GDP (previously 2.8 per cent of GDP),” it added.
Additionally, if crude oil averages USD 65 and the rupee stays at 70 against the dollar, then petrol and diesel prices could fall further on an average by Rs 4 or more.
This implies that diesel prices could head well below Rs 70 per litre and petrol well below Rs 75.
SBI expects inflation to hit 2.7-2.8 per cent in the next couple of months.
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