GST COLLECTION UP FOR SECOND MONTH, CROSSES ₹1 LAKH CRORE
GST collections in November grew for the third straight month to ₹1.04 L-cr, a rise of 1.4% y-o-y
NEW DELHI: Revenue from the Goods and Services Tax (GST) exceeded ₹1 lakh crore for the second consecutive month, coming in at ₹1,04,963 crore in November, a 1.4% year-on-year growth, and also registering a third straight month of growth -- an indication that economic activity in India is returning to normal after disruptions caused by the ongoing coronavirus disease (Covid-19) pandemic and restrictions imposed to fight it.
The revenue in November was almost flat when compared to the ₹1,05,155 crore collected in the previous month.GST collections were in contraction mode for six months to August.
NEW DELHI: Revenue from the Goods and Services Tax (GST) exceeded ₹1 lakh crore for the second consecutive month, coming in at ₹1,04,963 crore in November, a 1.4% year-on-year growth, and also registering a third straight month of growth —an indication that economic activity in India is returning to normal after disruptions caused by the ongoing coronavirus pandemic and restrictions imposed to fight it.
The revenue in November was almost flat when compared to the ₹1,05,155 crore collected in the previous month. GST collections were in contraction mode for six months to August.
“In line with the recent trend of recovery in the GST revenues, the revenues for the month of November 2020 are 1.4% higher than the GST revenues in the same month last year,” the Union finance ministry said in a statement.
The gross GST revenue collected in the month of November, 2020 is ₹1,04,963 crore of which Central GST (CGST) is ₹19,189 crore, State GST (SGST) is ₹25,540 crore, Integrated GST (IGST) is ₹51,992 crore (including ₹22,078 crore collected on import of goods), the statement added.
The November GST number is the latest in a spate of recent good news on the economic front.
GDP growth data leased last week showed that the Indian economy contracted by 7.5% in the three months ended September, bettering most analyst estimates. the economy shrank by a sharp 23.9% in the three months ended June, with two of these months coinciding with a hard lockdown imposed to fight the pandemic. Manufacturing activity, as indicated by the purchasing managers index continues to be in expansion territory, at 56.3, although this was lower than the 12-year high of 58.9 seen in October. The Nomura India Business Resumption Index, a measure of business activity with pre-pandemic levels (100) was at its highest ever value of 89.2 on Tuesday.
Analysts expect both October and part of November to have been good for businesses because of three kinds of demand: pent-up, festive, and organic. They also expect the end of the festive season (Diwali was in mid-November) to cause a dip in festive demand. November saw a 9% year-on-year increase in wholesale car sales (although these were 14% lower than in October). The challenge, they believe, is the sustainability of this through December and the last quarter of 2020-21.
The collection of compensation cess in November was ₹8,242 crore, including ₹809 crore collected on import of goods, it said. The cess collection has shown a marginal increase of about 3% compared to ₹8,011 crore in October. At the time of introducing the new indirect tax regime in July 2017, the GST law assured states a 14% increase in their annual revenue for five years (up to 2022) and assured them that their revenue shortfall would be made good through the compensation cess levied on luxury goods and sin products such as liquor, cigarettes, aerated water, automobiles, coal and tobacco.
Abhishek Jain, tax partner at consultancy firm EY said, “Second straight month of [₹] 1 lakh plus collection is certainly indicative of continued economic recovery and the collections being slightly more than same month last year is quite encouraging. This should also help in containing the shortfall of GST collections caused due to the pandemic.”
Based on a sharp decline in the GST revenue collections due to implementation issues and sudden outbreak of the Covid-19 pandemic, the GST Council in August estimated a total revenue shortfall for 2020-21 at ₹2.35 lakh crore. Out of the total amount, ₹1.10 lakh crore is the estimated shortfall in the current financial year because of implementation issues.
The total number of monthly summary statement of business activities (GSTR-3B returns) filed for November is 8.2 million, the statement said. indicating that the number of GST return filers has also grown by 2.5% in November this year compared to 8 million in the previous month.
The government has settled ₹22,293 crore to CGST and ₹16,286 crore to SGST from IGST as regular settlement. “The total revenue earned by Central Government and the state Governments after regular settlement in the month of November 2020 is ₹41,482 crore for CGST and ₹41,826 crore for the SGST,” the finance ministry’s statement said.