Finance Ministry on Wednesday reported collection from Goods & Services Tax (GST) at around ₹1.50 lakh crore in February. This is despite lesser days in the said month.
A Finance Ministry statement said the collection in the month under review is 12 per cent higher than the GST revenues in the same month last year, around ₹1.33 lakh crore. During the month, revenue from the import of goods was 6 per cent higher, and the payments from the domestic transaction (including import of services) were 15 per cent higher than the revenues from these sources during the same month last year.
“This month witnessed the highest cess collection of ₹11,931 crore since implementation of GST,” it said while adding that normally, February being a 28-day month, witnesses a relatively lower collection of revenue, but this year’s trend was different. Collection in February is related to goods consumed and services availed in January.
Read also: GST collection at ₹1.56-lakh cr in January
Although the statement has not given any reason for the high collection in February, officials attribute this to – better compliance, further improvement in consumption demand, especially for high-end goods & services and higher inflation. It must be noted that the retail inflation rate based on Consumer Price Index (CPI) surged to 6.52 per cent.
.Commenting on the latest data, Parag Mehta, Partner with N.A. Shah Associates said GST Collections are bound to increase due to stabilization and clarity in law. Further it has always been a trend for all tax collections to reflect an upward trajectory in the last 2-3 months of the financial year. “Major reasons include year-end complainces being streamlined and authorities being more stringent. Further, unlike earlier laws where information was limited, current GSTN portal gives a lot of data and information to the authorities to cross verify and detect suspicious transactions. Even the spending by the consumers have increased substantially leading to increase in collections on ongoing basis,” he said.
Vivek Jalan, Partner at Tax Connect Advisory, said the higher GST Collections are a result of increased audits, assessments and proceedings in large entities that in turn impact the entire supply chain. For example, in case of metals industry, if a scrap supplier in the chain defaults on GST compliance, recovery proceedings are started against the metals manufacturer when it is assessed as it is considered to be the beneficiary and sometimes the ‘mastermind’ of the transaction.
“With the assessment of the large entities, the collections from smaller ones also improve as the eco-system is forced join the main stream,” he said.