This ‘clearly indicates that the economy is recovering at a fast pace. The robust GST revenues are likely to continue in the coming months too,’ says the Finance Ministry.
India’s gross GST revenues in July recovered sharply to ₹1,16,393 crore, after slipping below the ₹1 lakh crore mark for the first time in eight months in June.
The government called the collections a sign of a rapid economic recovery from the second COVID-19 wave, though economists said they indicate an ‘incomplete’ rebound.
“With the easing out of COVID restrictions, GST collection for July 2021 has again crossed ₹1 lakh crore, which clearly indicates that the economy is recovering at a fast pace. The robust GST revenues are likely to continue in the coming months too,” the Finance Ministry said in a statement on Sunday.
The July numbers include returns filed between July 1 and July 5, amounting to ₹4,937 crore as taxpayers were given relief on delayed return filing for June in the wake of the second wave of the COVID-19 pandemic.
The July collections were 33% higher than a year ago, with GST collected on the import of goods rising 36% and domestic transactions (including import of services) growing by 32%.
“There is a heartening sequential increase, as well as a substantial year-on-year growth, but GST collections remain well below the all-time high recorded in April of ₹1.41 lakh crore. In our view, this is further evidence that the graduated unlocking in June 2021 has triggered an incomplete recovery, that is expected to strengthen in July,” said Aditi Nayar, chief economist at ICRA.
While most States reported positive growth in tax collections compared to July 2020, there were significant variations — Odisha and Jharkhand reported a 54% uptick, followed by Haryana (53%) and Maharashtra at 51%, while Tamil Nadu and Gujarat clocked 36% growth.
Kerala reported a 27% surge in GST revenues, despite having stricter restrictions in place than the likes of Uttar Pradesh, West Bengal and Rajasthan, which recorded a growth of 18%, 15% and 12%, respectively.
“The pace of growth across the States was highly uneven in July 2021, with some industrial heavyweights recording a sharp expansion,” Ms. Nayar said.
The Ministry attributed June’s blip in GST revenues at ₹92,849 crore, ‘after posting above ₹1 lakh crore mark’ for eight successive months to the complete or partial lock downs due to COVID in most States and Union territories in May.
“The improvement in GST collections both on domestic transactions and imports, accompanied by the fact that major producing States have shown significant increases, would indicate that the economic activities have resumed across the country,” said M.S. Mani, senior director at Deloitte India.
July’s collections include central GST revenue of ₹22,197 crore, State GST of ₹28,541 crore and Integrated GST of ₹47,865 crore, of which nearly ₹28,000 crore was from import of goods. Compensation Cess collections, used to recompense States for adopting the GST regime, stood at ₹7,790 crore, including ₹815 crore collected on import of goods.
“The government has settled ₹28,087 crore to CGST and ₹ 24,100 crore to SGST from IGST as regular settlement. The total revenue of Centre and the States after regular settlement in the month of July 2021 is ₹50,284 crore for CGST and ₹ 52,641 crore for the SGST,” the Ministry said.