GST collections hit all-time excessive of Rs 1.42 lakh crore

MARKING A brand new excessive since its rollout in July 2017, gross collections of Goods and Services Tax (GST) rose to Rs 1.42 lakh crore in March, for gross sales in February, in keeping with information launched by the Union Finance Ministry on Friday — a 14.7 per cent rise from March 2021 and a forty five.6 per cent spike from March 2020.

The sharp surge has come on the again of anti-evasion measures, “especially action against fake billers”, and a pick-up in financial exercise. The common month-to-month gross GST collections for FY22 now stands at Rs 1.23 lakh crore, which is 30.5 per cent larger than the month-to-month common seen within the earlier fiscal.

The influence of Covid was seen from the drop in GST income at a month-to-month common of Rs 94,733 crore in 2020-21, which was 9.5 per cent decrease than the month-to-month common of Rs 1.04 lakh crore within the pre-Covid interval of 2019-20.

“Coupled with economic recovery, anti-evasion activities, especially action against fake billers, have been contributing to the enhanced GST. The improvement in revenue has also been due to various rate rationalisation measures undertaken by the (GST) Council to correct inverted duty structure,” the Finance Ministry stated in an announcement.

It stated the entire variety of e-way payments generated in February was 6.91 crore, larger than 6.88 crore seen a month in the past, regardless of it being a shorter month, which signifies the “recovery of business activity at faster pace”.

The earlier highest assortment of GST revenues was in January 2022 of Rs 1.40 lakh crore. The common month-to-month gross GST assortment for the final quarter of FY22 has been Rs 1.38 lakh crore towards the typical month-to-month assortment of Rs 1.10 lakh crore, Rs 1.15 lakh crore and Rs 1.30 lakh crore within the first, second and third quarters, respectively. The Centre’s GST assortment now has exceeded the revised finances goal of Rs 5.70 lakh crore set for the earlier fiscal ended March 31.

DefinedThe street forward

GST revenues are anticipated to rise additional within the coming month attributable to monetary year-end exercise. While enhancing collections could assist set the stage for price rationalisation and a GST price construction change, together with hikes, inter-state variations could current a case for extension of compensation by some states past the mandated interval ending in June this 12 months.

“Higher GST collections, in addition to customs duty (rebound in gold imports in Feb 2022 post third wave) as well as direct taxes are likely to have pushed up the gross tax revenues of the GoI well above the FY2022 RE. Based on the additional tax devolved to the states in Feb-March 2022 (excluding arrears pertaining to earlier years), we have assessed that the gross tax revenues of the GoI likely overshot the RE of Rs 27.6 trillion by a considerable Rs 2.25 trillion,” Aditi Nayar, Chief Economist, ICRA stated.

“Moreover, we estimate the net tax revenues (net of devolution to States) in FY2022 at Rs 18.6 trillion, a robust around Rs. 0.9 trillion higher than the RE (Rs 17.7 trillion),” she stated.

With disinvestment receipts falling in need of goal, the upper tax revenues present the Government with a cushion of Rs 500 billion, Nayar stated.

“Additionally, we expect capex may undershoot the FY22 RE by around Rs 600 billion. This suggests a total cushion of Rs 1.1 trillion for higher revex, which is equivalent to the size of the third supplementary demand for grants. Overall, we expect the fiscal deficit of the GoI for FY2022 to be broadly similar to the revised target of Rs 15.9 trillion,” she stated.

Experts, nevertheless, pointed to inter-state variations in GST collections as an space of concern.

“GST collections grew more than 15 per cent for Punjab, Haryana, Odisha, Maharashtra and Andhra Pradesh in March 2022. For states such as West Bengal, Jharkhand, Chhattisgarh, Madhya Pradesh, Tamil Nadu, Telangana, Rajasthan and Uttar Pradesh, growth was less than 10 per cent. This suggests the last inter-state variation in consumption and investment growth and provides more support to states’ demand for continuation of GST compensation beyond five years,” Devendra Kumar Pant, Chief Economist, India Ratings & Research, stated.

“While state-wise variations exist in terms of the growth in GST collections, it would be interesting to see an analysis linking the state-wise GDP growth with the GST collections during the same period,” M S Mani, Partner, Deloitte India, stated.

Of the general Rs 1.42 lakh crore in income, CGST is Rs 25,830 crore, SGST is Rs 32,378 crore, IGST is Rs 74,470 crore (together with Rs 39,131 crore collected on import of products) and cess is Rs 9,417 crore (together with Rs 981 crore collected on import of products).

The Government has settled Rs 29,816 crore to CGST and Rs 25,032 crore to SGST from IGST. The whole income of Centre and the states in February after common settlement is Rs 65,646 crore for CGST and Rs 67,410 crore for SGST.