India’s economic recovery is gathering steam. The GST collection for the month of March’21 has topped Rs 1.23 lakh crore, setting a new record since the implementation of Goods and Services Tax in July 2017. Out of which, CGST is ₹ 22,973 crore, SGST is ₹ 29,329 crore, IGST is ₹ 62,842 crore (including ₹ 31,097 crores collected on import of goods) and Cess is ₹ 8,757 crore (including ₹ 935 crores collected on import of goods).
The government has settled ₹ 21,879 crores to CGST and ₹ 17,230 crores to SGST from IGST as a regular settlement. In addition, the Centre has also settled ₹ 28,000 crores as IGST ad-hoc settlement in the ratio of 50:50 between Centre and States/UTs. The total revenue of Centre and the States after regular and ad-hoc settlements in the month of March 2021 is ₹ 58,852 crores for CGST and ₹ 60,559 crores for the SGST. The Centre has also released a compensation of ₹ 30,000 crores during the month of March 2021.
In line with the trend of recovery in the GST revenues over the past five months, the revenues for the month of March 2021 are 27 percent higher than the GST revenues in the same month last year. During the month, revenues from the import of goods were 70 percent higher and the revenues from the domestic transactions (including import of services) were 17 percent higher than the revenues from these sources during the same month last year, the ministry said.
“In addition to the trend of higher overall GST collection over the past six months, all major states have shown a significant increase compared to the previous year,” said MS Mani, senior director at Deloitte India. Further, the increase in collections on imports accompanied by the increase in domestic transactions would indicate that the overall production/consumption cycle is back to normal, he added.
GST revenues improved steadily through 2020-21 rising from a (-)41 percent in the first quarter to (-)8 percent in the second and to 8 percent and 14 percent in the third and fourth quarters compared to the same time-frame of the previous year.
GST collection, which directly reflects the state of economic activity, had plummeted to a record low of Rs 32,172 crore in April 2020, after the government imposed a nationwide lockdown to curb the spread of coronavirus.
The lockdown, categorized by several agencies as one of the strictest in the world, pummelled the economy, as demand dried up and non-essential businesses were shuttered. In the April-June quarter, the economy contracted by the steepest ever 24.4 percent, and 7.3 percent in the September quarter. However, in October-December it came back in positive territory with 0.4 percent growth.
Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, Income-tax and Customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue over last few months, the government claimed.
A key highlight is that barring two Union Territories (Daman & Diu and Andaman & Nicobar Islands), all 28 States and 8 UTs have reported a growth in the collection. Big contributors such as Maharashtra registered a growth of 14 percent, while Gujarat, Karnataka, Tamil Nadu, and Andhra Pradesh saw an increase of 20 percent, 11 percent, 23 percent, and 5 percent, respectively. Another big contributor Haryana posted a 17 percent jump in collections while Delhi raked in 20 percent more in March than the corresponding month of last fiscal.