GST collections hit an all-time high of ₹1.15 lakh cr in Dec

Signalling a strong economic recovery, GST collection in December hit an all-time high of ₹1,15,174 crore. The higher numbers were also due to the crackdown on evaders.

According to data released by the Finance Ministry on Friday, the December mop-up was the highest since the introduction of the Goods and Services Tax in July 2017. The previous best was ₹1,13,866 crore, in April 2019. April revenues tend to be high as they pertain to the returns of March, which marks the end of the financial year.

The December 2020 revenues are significantly higher than November’s collections of ₹1,04.963 crore.

“This has been due to the combined effect of the rapid economic recovery post-pandemic and the nationwide drive against GST evaders and fake bills along with many systemic changes introduced recently, which have led to improved compliance,” the statement said.

In line with the recent trend of recovery in GST mop-up, the revenues for December are 12 per cent higher than in the the same month last year. In December 2020, the revenue from import of goods was 27 per cent higher, and that from domestic transactions (including import of services) was up 8 per cent over the same month last year.

Till now, GST revenues have crossed ₹1.1-lakh crore thrice. This is the third month in a row this financial year that GST revenues have exceeded ₹1-lakh crore. The average growth in GST revenues during the last quarter was 7.3 per cent compared to (-) 8.2 per cent during the second quarter and (-) 41.0 per cent in the first.

Confidence in economy

MS Mani, Senior Director at Deloitte India, said the continued uptick in GST collections should give confidence in the resilience of the economy and indicates that business activities have completely resumed and demand for goods and services continues to be high.

A repeat of ₹1.15-lakh crore revenue will be truly ambitious, he said. However, a ₹1-lakh-crore monthly collection can be the new normal. One needs to remember that significant portions of some services, such as hospitality, are still under lockdown and many of them attract 28 per cent GST. When they open up, they will bring further buyoancy in collection, he said.

Break-up for clarity

Rajat Bose, Partner at Shardul Amarchand Mangaldas, feels the government should provide a break-up of the GST collected through filing of returns and through recovery drives initiated by the DRI and DGGSTI, which would give a true picture of the extent of economic recovery.