Tax officials may ask for 6% reduction in collection target in Budget 2019

As for indirect taxes, the central goods and services tax (CGST) growth target might be cut by Rs 70,000-80,000 crore in the full Budget or 11.5-13 per cent of the interim Budget if one assumes a realistic growth of 17-20 per cent against the previous year’s actual collection. The growth will be 35 per cent if the target is not changed. 

The CGST target collection for 2018-19 was also lowered by Rs 1 trillion in the interim Budget presentation this year (when that financial year was still not over).

However, it still fell short by over Rs 40,000 crore. The gross actual total (direct plus indirect) tax collection in 2018-19 fell short by Rs 1.7 trillion or 7.5 per cent of the Revised Estimates for the year, given in the interim Budget. That, coupled with the slip in economic growth, makes the target for 2019-20 given in the interim Budget highly unrealistic, contend officials. In terms of net collections (after devolution to states) the shortfall was Rs 1.6 trillion or 11 per cent of the revised estimates for FY'19.
 

With the government itself expecting the economic slowdown to continue till the end of the first quarter (April-June) of FY20, the revenue position is unlikely to see a significant driver till at least the fourth quarter and that only if growth picks up, officials said.