GST mop-up hits ₹1.17L-cr in September
NEW DELHI: Goods and services tax (GST) revenue crossed ₹1.17 lakh crore in September with a 22.5% year-on-year jump, the fourth-highest collection since its launch on July 1, 2017, and second-highest in the current financial year, signalling a sustained recovery of business activities after the second wave of Covid-19 pandemic and increased compliance.
Indirect tax collections, a weathervane of economic health, have crossed ₹1 lakh crore for three consecutive months after plunging below the benchmark in June (₹92,849 crore) because of the bruising second wave of Covid-19 that ravaged the country in April and May. The June collection figure indicates the volume of business transactions that took place in May. In May this year, most of the states were under complete or partial lockdown due to the second wave. There was, however, no federal lockdown this year as there was last year.
“The average monthly gross GST collection for the second quarter of the current year has been ₹1.15 lakh crore, which is 5% higher than the average monthly collection of ₹1.10 lakh crore in the first quarter of the year. This clearly indicates that the economy is recovering at a fast pace,” the Union finance ministry said in a statement.
Coupled with economic growth, anti-evasion activities, especially action against fake billers have also contributed to the enhanced GST collections, it added. “It is expected that the positive trend in the revenues will continue, and the second half of the year will post higher revenues.”
India’s gross domestic product (GDP) grew at 20.4% in the first quarter of the year, largely on account of the base effect. RBI expects it to grow at 9.5% for the entire year. While most high-frequency indicators suggest a recovery in the economy, the jury is still out on how sustainable this is.
MS Mani, senior director at consultancy firm Deloitte India, said: “The GST collection figures indicate that growth of the economy is leading to stable collections, which would help in achieving the fiscal deficit target of 6.8% of GDP.”
Official data show buoyancy in tax collections in most of the industrial states. “Most of the key manufacturing states reporting a growth of 20% plus compared to last year does indicate that an economic revival is clearly in progress across key states,” Mani said.
According to the finance ministry, September revenue from import of goods was 30% higher compared to the same period last year, and the revenues from the domestic transactions (including import of services) are 20% higher than the revenues from these sources.
“The significant increase in GST collections both from import and domestic transactions indicate an acceleration in business activities, which is spread across states,” Mani explained. Experts said GST collection is increasing steadily and will continue to do so in the coming festive months due to increased demand.