GST collection in Nov at ₹1.31 lakh cr
The indirect tax collections also crossed ₹1.30 lakh crore for the second month in a row
NEW DELHI: Goods and Services Tax (GST) collection in November this year surged to over ₹1.31 lakh crore, the second highest since the new tax regime was launched in July 2017, signalling robust and sustained recovery of business activities after the second wave of the Covid-19 pandemic and increased compliance. This is the fifth consecutive month in which collections have crossed the ₹1 lakh crore benchmark.
The indirect tax collections, a weathervane of economic health, also crossed ₹1.30 lakh crore for the second month in a row; the data comes a day after the country’s statistics office released data that showed that the economy grew at 8.4% in the second quarter ended September on the back of increased public spending, exports and agriculture.
Together, the two, analysts said, show that the economic performance has surpassed the pre-pandemic level. According to data released by the Union finance ministry on Wednesday, the GST revenue in November (for transactions in October) at ₹1,31,526 crore is 25% higher than the GST revenues in the same month last year and 27% over the 2019 value. The highest ever GST collection of Rs 1,41,384 crore was reported in April, ahead of the second wave.
The value plunged below the benchmark in June (Rs 92,849 crore) because of Covid-19 resurgence in April and May this year. 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.
MS Mani, partner at consulting firm Deloitte India said GST revenues are in sync with the economic growth figures and reflect sustained economic recovery along with increased compliances.
“There has been a significant increase in the GST surveillance activities in recent times based on the data available with the GSTN, these would have also contributed to the increased collections, over and above the economic growth, which is the key driver of GST collections.” GST Network (GSTN) is the IT backbone of the indirect tax regime.
The recent trend of high GST revenues is the result of various policy and administrative measures that have been taken in the past to improve compliance, the finance ministry said in a statement. “Central tax enforcement agencies, along with the state counterparts have detected large tax evasion cases, mainly cases relating to fake invoices, with the help of various IT tools developed by GSTN that use the return, invoice and e-way bill data to find suspicious taxpayers.” In the past year, the GST regime took several initiatives to increase compliance such as enhancing system capacity, nudging non-filers, facilitating auto-population of returns, blocking of e-way bills and stopping input-tax credits to unscrupulous entities.
Experts are, however, cautious due to the threat of new Covid variant -- Omicron, which may impact the global economy. Rajat Bose, partner at law firm Shardul Amarchand Mangaldas & Co said, “The collections of November are indicative of a robust economic growth. The collections should continue to see a rise in the months to come, if we don’t see another wave in the country.”