ISLAMABAD: When the General Sales Tax (GST) collection faced a negative growth of 6.6 percent at domestic stage in current fiscal year, there is one Regional Taxpayer Office (RTO) in Rawalpindi where phenomenal average positive growth of 39.61 percent in GST collection on domestic front was witnessed even after excluding defense purchases.
Without integration of Inland Revenue Service (IRS) software and web-based one customs (WeBOC) software for ensuring real time exchange of data under umbrella of FBR, the tax maximisation efforts will continue facing failures.
Although, the FBR’s Information Technology (IT) Member deals with both IRS and Customs but there is no institutional mechanism for sharing each others’ data without seeking any approval from any authority. In such prevailing circumstances, the achieving of ambitious tax target of Rs3604 billion will remain daunting task.
At a time when the FBR’s high-ups argued that the reduced oil prices and other incentives on GST front caused substantial revenue loss to the national exchequer as the GST collection on domestic side nosedived by negative 6.6 percent in first half of the current fiscal year.
But this is not the whole truth of the in-depth story as the RTO Rawalpindi in which there is no jurisdiction of bigger industrial units. During July of the current fiscal year, the RTO collection stood at Rs321.97 million in FY 2016-17 against Rs202.96 million in the same month of the last financial year 2015-16, registering net growth of 58.64 percent. The GST collection at domestic stage fetched Rs367.24 million in August 2016-17 against Rs263.64 million in the same month of the last financial year, registering a growth of 39.30 percent.
In September 2016 the GST collection stood at Rs391.63 million against Rs354.59 million in the same month of the last financial year. The GST collection on domestic front achieved phenomenal growth of 49.12 percent in October 2016-17 by collecting Rs404.29 million in RTO Rawalpindi against collection of Rs271.11 million in the same month of last financial year 2015-16.
This collection stood at Rs348.28 million in Nov 2016-17 against Rs260 million in the same month of the last fiscal year. The highest growth achieved by RTO Rawalpindi witnessed in December 2016-17 by touching 85.24 percent as its collection stood at Rs426.67 million in Dec 2016-17 against Rs230.33 million in same month of FY 2015-16.
The RTO Rawalpindi collected Rs486 million in Jan 2017 against Rs384.37 million in the same month of last fiscal year 2015-16. The overall collection in seven months stood at Rs2746.08 million in July-Jan period of 2016-17 against collection of Rs1967 million in the same period of last financial year under the jurisdiction of RTO Rawalpindi related to GST collection on domestic, registering an average growth of 39.61 percent. Such a phenomenal growth on account of GST collection has not included defense purchases so not single factor involved for achieving higher growth. The GST collection can easily be jacked up if IRS and WeBOC software is integrated at institutional level. When the FBR is making efforts to get connected with NADRA, SBP, and Finance Ministry then why it is not integrated with each other at IRS and Customs groups.
There is no doubt that GST is looted at domestic level. As per rules, any invoice presented to government departments after making a purchases is required to deduct 1/5th of GST with the assumption that supplier will make 4/5th payment to FBR, but majority of vendors do not deposit 4/5th of GST to FBR or any other department.
If government can only issue circular that payment will only be made to vendor after the production of 4/5th Challan copy of sales tax, it can be guaranteed that GST collection will increase manifold.