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Indicating a sustained recovery in the economy, GST collections in October crossed ₹1.05-lakh crore, up nearly 10 per cent both year-on-year (YoY) and over September. This is the second successive month of growth after five months of contraction. For the first time in FY21, collections have gone past the ₹1-lakh crore mark.
Among States and Union Territories (UTs), barring Delhi, Sikkim and a few others, all have shown a positive change in GST collections, with growth ranging from 3 to 138 per cent.
In an interview with BusinessLine , Finance Secretary Ajay Bhushan Pandey said data related to GST collection, eWay bill and e-invoice clearly indicate not just a recovery but also a definite move towards a sustained positive zone.
E-invoices take off
eWay bills, which are electronic documents showing the GST paid on goods moved from one place to another, have registered over 21 per cent growth last month. E-invoices — electronic documents showing buy and sell transactions along with tax payment — too have been generated in impressive number in October, the very first month of launch.
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E-invoice can lead to invoice-based lending for corporates from banks, says Ajay Bhushan PandeyA Finance Ministry statement said that during October, the revenue from import of goods was 9 per cent higher and that from domestic transactions (including import of services) was 11 per cent higher YoY. The growth in GST revenues over July, August and September clearly shows the trajectory of recovery of the economy and, correspondingly, of tax revenues, it said.
Consumption boost
Commenting on the data, MS Mani, Senior Director at Deloitte, said that the ₹1.05-lakh-crore collectionindicate the definitive revival of consumption and festival spends across the economy.
“Continuance of this trend will help in narrowing the fiscal deficit for FY21 and will go a long way in reviving business confidence across sectors as the impact of the unlockdown process across States gets translated into GST collection figures,” he said.
Abhishek Jain, Tax Partner at EY, said the uptick in collections on a month-on-month and YoY basis is quite a welcome one for the government and the economy.
Three key reasons
“Some potential reasons for this surge could be the rise in demand on account of the festivals, and input tax credit and other similar reconciliations which were due for businesses in September,” he added.
Kapil Rana, founder and Chairman, HostBooks Ltd, said the October collection can be looked at as a result of three major factors — resonance of the economy, indirect and direct spending push by the government and people during the festival season, and the overall/pending trade recovery from the slump period.
“Further, the number of GSTR-3B returns filed has also increased significantly. All these scenarios suggestb a strong recovery of the economy, strong fundamentals and excellent governance,” he said.
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