GST mop-up rises 56% to ₹1.45L cr in June
Rajeev Jayaswal
NEW DELHI: Goods and services tax (GST) revenue in June was ₹144,616 crore, the second highest to date, a 56% growth over the same month a year ago, and 3% higher than May’s revenue— an indication of the ongoing economic recovery and increased compliance (and also of inflation). The June collection is for transactions in May.
Releasing the gross GST collection figure for June, Union finance minister Nirmala Sitharaman said the ₹1.40 lakh crore appears to be the new normal. June is the fourth consecutive month to have seen monthly GST collections in excess of ₹1.40 lakh crore. All told, it is the fifth month since the tax regime’s inception on July 1, 2017, that collections have crossed that level. “So, the trend that was being talked about [revenue plunging during the pandemic period], we are now reversing that and showing that the GST revenue remain above ₹1.40 lakh crore. So, ₹1.40 (lakh crore) seems to be the rough bottom-line. We are not going below that, we are only collecting more than that,” she said at a function organised to celebrate the fifth anniversary of the GST regime.
Recollecting GST’S five-year journey, and commenting on the robustness of the regime, Sitharaman said even during the two worst pandemic-hit years when revenues fell significantly, tax officials held the ground and performed phenomenally. Due to the Covid-19 pandemic, GST collections plunged below the ₹1 lakh crore mark for seven consecutive months with lowest ever revenue of ₹32,172 crore in April 2020 (when there was a nationwide hard lockdown).
Just ahead of the five-year anniversary, the GST Council, in a meeting earlier in the week agreed to rationalise the tax on some products and services, and do away with exemptions. While some states sought an extension of the guaranteed revenue increase compensation period (which ended on June 30), no decision has been taken on this yet, and some experts are of the view that this will not happen. The rationalisation and the decision to not extend the compensation period are expected to stabilise the GST regime.
“May, June are not brilliant months. Maybe April (is a good month), but May and June are not great months for collections. But, you still managed to get great collections. Within the five years, the GST is showing what it is,” Sitharaman said on Friday, addressing tax officials.
The GST collection in June (reflecting business activities of May) is the second highest after that in April, ₹1,67,540 crore. March is the last month of a fiscal year, and sees more transactions typically, resulting in high revenue in April.
The collection in June 2022 is not only be the second highest but also has broken the trend of (June) being (a) low collection month as observed in the past,” the Union finance ministry said in a statement.
The average monthly gross GST collection for the first quarter of 2022-23 is ₹1.51 lakh crore against the average monthly collection of ₹1.10 lakh crore in the first quarter of the last fiscal year, showing an increase of 37%, the ministry added. Revenue for the month of June is 56% higher compared to the same month previous year (₹92,800 crore).
The gross GST collections in June was robust despite a fall in generation of e-way bills. The total number of e-way bills generated in the month of May was 73 million , 2% less than the 74 million e-way bills generated in the month of April.
According to MS Mani, partner at Deloitte India, the high collections, “which lead to a new monthly normal of ₹1.4 lakh crore in Q1 of FY23, comes on the heels of several macro-economic parameters being on the upswing”. “The increase in statewise collections compared to the same month last year is impressive as many large states have shown an increase in excess of 40%. Since this comes in the backdrop of the guaranteed compensation to states coming to an end, it would assuage many states who were worried about their revenue mobilization ability in the post cess period,” he said.
Abhishek Jain, Partner Indirect Tax, KPMG in India, said: “These consistent high collections indicate recovery from the pandemic, but also inflation and tight checks implemented by the government. With this being said, the collections should give some comfort to both Centre and State on the revenue front.”