The expected figures of GST revenue collections as declared in the 2018 Union Budget and those presented in the interim Budget 2019-20 showed a significant difference. As conjectured by the policymakers, some of the prime GST benefits included ease in compliance and transparency in the indirect tax structure.

However, during the interim Budget, the Government revised about GST collection target from the earlier Rs. 7.44 crore to Rs. 6.44 crore. That’s a shortfall of Rs. 1 lakh crore.


It was well understood that the benefits of the GST system would need some time to be realised, but what is more concerning is the mismatch in forecasting. It is essential to figure out the cause behind this inconsistency. According to reports, the actual CGST revenue is 25% lower than the expected revenue.

Experts have been able to figure out some possible causes for this mismatched estimation. Given the vast scale of business operations in the country, some states, especially the big ones have shown a major deficiency in their revenue collection. It might have occurred because of the mix-up surrounding GST rates.

Also, with the goods & services tax Council making multiple changes in provisions and clauses, confusion regarding this taxation system remains large. Some experts also attribute the dip in tax collection due to GST rate cut in 23 goods and services along with technical glitches arising while paying goods and services tax.

If states fail to reach their increased revenue targets, the Centre will have to bear the same. This can put a huge burden on the exchequer and may lead to a budget cut in some of the policies. It must be noted that the Government has announced several plans related to farmers and other sections of the society in the interim Budget.

Inadequate GST collection can make it difficult to arrange funds for all these policies, subsequently putting a question mark on their execution.