Goods and services tax (GST) collected in September rose to Rs 1.17 trillion, which is 23 per cent higher than in the same period a year ago, and 27.3 per cent more than the collection in the pre-Covid year of 2019-20.
The finance ministry expects the positive trend will continue and the second half of the year will post higher revenues. It said the constant increase in collection in the last five months indicates the economy is recovering at a fast pace.
Average monthly gross GST collection for the second quarter of 2021-22 has been Rs 1.15 trillion, which is about 5 per cent higher than the average monthly collection of Rs 1.10 trillion in the first three months of the fiscal year.
Besides, measures against anti-evasion activities, especially action against fake billers, have been contributing to enhanced GST collection, the ministry stated on Friday.
Collection continues to exceed Rs 1.1 trillion for the third month. In August it was stood at Rs 1.12 trillion, and in July Rs 1.16 trillion.
The revenue for September 2020 saw growth of 4 per cent over that in September 2019.
Economist expects the uptick to continue during the festive season, which would help the Centre achieving a fiscal deficit target of 6.8 per cent.
“With the economy having largely recovered from the lows of the pandemic, GST collection has stabilised. With the festive season coming, we can expect an uptick in collection,” said Abhishek Jain, tax partner, EY.
M S Mani, senior director, Deloitte India, said: “The GST collection figures indicate that growth in the economy is leading to stable collection, which would help in achieving the fiscal deficit target of 6.8 per cent of GDP. Most of the key manufacturing states reporting a growth rate of 20 per cent plus compared to last year do indicate an economic revival is clearly in progress across key states.”
During the month, growth in revenues came on the back of imports and was 30 per cent higher. The revenues from domestic transactions (including import of services) rose 20 per cent over the same month last year.
In September, central GST collection was Rs 20,578 crore, state GST Rs 26,767 crore, IGST Rs 60,911 crore.
Statewise, GST revenues grew 29 per cent in Karnataka, 28 per cent in Gujarat, followed by 22 per cent in Maharashtra and 21 per cent each in Tamil Nadu and Andhra Pradesh. Telangana recorded a 25 per cent surge in revenues, while Odisha saw a sharper 40 per cent growth rate.
Overall, tax revenue collection could surprise on the upside by 0.7-0.9 per cent of GDP. However, the trend in other revenue streams, namely divestment/loss in telecom-related payments and (pick-up in) spending trends, would be key for fiscal management, said Madhavi Arora, lead economist, Emkay Global Financial Services.
“With the government absorbing a supply risk of Rs 1.6 trillion of GST compensation cess to states, technically the government’s own fiscal funding-related borrowing has de facto been cut by the same amount,” Arora said.
The Centre had released GST compensation of Rs 22,000 crore to the states to meet their revenue gap.