GST collection rises to an all-time high of Rs 1.42 trillion in March

Goods and services tax (GST) collection soared to an all-time high of Rs 1.42 trillion in March, staying above the Rs 1.10-trillion level since July last year. The previous high was recorded in January this year at over Rs 1.40 trillion.

The rise in GST revenues in March mirrored the rebound in the GST e-way bill generation in the previous month. The growth momentum is expected to continue and could reflect in the April collections, said experts.

The collection in March grew nearly 15 per cent compared with the year-ago period, while it was 46 per cent higher compared with the March 2020 mop-up, according to the provisional data released by the finance ministry on Friday.

The GST collection in February, impacted by the Omicron-led wave, had come in at Rs 1.33 trillion, significantly lower than the Rs 1.41 trillion netted in January.

The total number of e-way bills generated in February 2022 was 69.1 million, as against 68.8 million in January, despite being a shorter month, indicating recovery of business activity at a faster pace, the ministry said.

The robust mop-up could be attributed to the government’s tightened compliance measures and crackdown on GST evaders and fake bills. Besides, the improvement in revenue has also been due to various rate rationalisation measures undertaken by the GST Council to correct the inverted duty structure, the ministry said.

“The record GST collections have also been aided by the strong sales activity of corporates in March, as they raced to close the fiscal with high top line growth. This had a direct bearing on GST, which is a transaction tax,” said M S Mani, partner, Deloitte India. With major economic indicators on an upswing, aided by a data-mining approach to detect cases of GST evasion, there has been a significant impact on the collections,” Mani added.

During the month, the revenues from import of goods were 25 per cent higher, and the revenues from domestic transactions (including import of services) were 11 per cent higher than the revenues from these sources during the same month last year, the ministry pointed out.   

Of the total collection, CGST was Rs 25,830 crore, SGST Rs 32,378 crore, IGST Rs 74,470 crore (including Rs 39,131 crore collected on import of goods), and cess was Rs 9,417 crore (including Rs 981 crore collected on import of goods). The average monthly gross GST collection for the last quarter of the FY22 was Rs 1.38 trillion, according to the official statement.

“Higher GST collections, in addition to customs duty (rebound from gold imports in February post the third wave), as well as direct taxes, are likely to have pushed up the gross tax revenues of the government well above the FY2022 RE. We expect the collections to rise further in the next month, benefitting from improved economic activity and year-end adjustments,” said Aditi Nayar, chief economist, ICRA.

Explaining the fiscal position of the Centre, Nayar said that based on the additional tax devolved to the states in February-March 2022 (excluding arrears pertaining to earlier years), we have assessed that the gross tax revenues of the GoI are likely overshot the RE of Rs 27.6 trillion by a considerable Rs 2.25 trillion. Moreover, we estimate the net tax revenues (net of devolution to states) in FY2022 at Rs 18.6 trillion, a robust Rs 0.9 trillion higher than the RE (Rs 17.7 trillion).”