Finance ministry to shift to cash basis accounting for GST this fiscal

To bridge the lag in actual revenue accrual, the finance ministry will shift to cash basis accounting for the goods and services tax (GST) this fiscal. Monthly collections will be reported on the first working day of the following month.

Till now, monthly tax returns under GST, which has combined 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 led to a situation wherein the government was able to collect tax revenue for one month less in the first year of GST roll out. To overcome this, GST collections for April will be reported on actual basis on May 1, officials said.