~1.19-trn GST boost for FM on Budget-eve

Collections at a new peak in January

Aday ahead of the Union Budget, which is likely to report a huge fiscal deficit, the government has got some cushion with goods and services tax (GST) collection touching a record high of ~1.19 trillion in January.

Since the figure pertained to collection till 6 pm on January 31, some more is expected to come into the government coffers for the month.

GST collection surpassed ~1 trillion for the fourth straight month due to economic recovery and because of government measures to tighten its noose on tax evaders.

GST collection grew 8 per cent during the month on a high base of ~1.10 trillion in January last year and breached the earlier record of ~1.15 trillion of December 2020, the data released by the Ministry of Finance on Sunday showed.

Collection posted growth for the fifth straight month in January after months of disruption caused by the Covid-19 lockdown.

The collection mostly accounts for transactions done in December. The number of GSTR-3B returns filed for January touched 9 million against 8.7 million in December.

The robust collection is important since the Centre’s fiscal deficit has crossed the Budget estimate by 45.5 per cent till December 2020-21. While it is not expected that the government will rein in the deficit at 3.5 per cent of GDP as was projected in the estimates, the collection will play a role in narrowing the deficit in the wake of increased expenditure on health, muted disinvestment receipts, low direct taxes, and stimulus packages.

“GST revenues during January 2021 are the highest since the introduction of GST and have almost touched the ~1.2 lakh crore mark. The GST revenues above ~1 lakh crore for a stretch of last four months and a steep increasing trend over this period are clear indicators of rapid economic recovery post pandemic,” the Ministry of Finance said in a release. The ministry also attributed the collection to the closer monitoring of fake billing, deep data analytics using data from multiple sources including GST, income-tax and Customs IT systems, and effective tax administration.

“In addition to the sustained economic revival witnessed in the past few months, the increased collections are also on account of the initiatives taken by the tax administration to curtail evasion, monitor input tax credits and build taxpayer profiles based on other databases,” said M S Mani, senior director at Deloitte India.