GST collection rises 23% to Rs 1.17 trillion in September
The Finance Ministry expects the positive trend to continue and higher revenues in the second half of the year. It said the steady increase in collections over the last five months indicates that the economy is recovering at a faster pace.
The average monthly gross GST collection for the second quarter of 2021-22 stands at Rs 1.15 trillion, which is almost 5 per cent higher than the average monthly collection of Rs 1.10 trillion in the first three months of the financial year.
In addition, measures against anti-theft activities, especially action against counterfeit billers, are contributing to increase in GST collections, the ministry said on Friday.
For the third month as well, the collection continues to cross Rs 1.1 lakh crore. It was Rs 1.12 lakh crore in August and Rs 1.16 lakh crore in July.
The revenue for September 2020 saw a growth of 4 per cent as compared to September 2019.
The economist expects the momentum to continue during the festive season as well, helping the Center achieve its fiscal deficit target of 6.8 per cent.
“With the economy largely recovering from the lows of the pandemic, GST collections have stagnated. With the festive season approaching, we can expect a pick-up in collections,” said Abhishek Jain, Tax Partner, EY.
MS Mani, Senior Director, Deloitte India, said: “GST collection figures show that growth in the economy is moving towards stable collections, which will help achieve the fiscal deficit target of 6.8 per cent of GDP. Most of the major manufacturing states, reporting a growth rate of over 20 per cent over the previous year, have indicated that economic revival is clearly in progress in the major states.
During the month, the increase in revenue was on account of imports and was 30 per cent higher. Revenue from domestic transactions (including import of services) grew by 20 per cent over the same month last year.
Central GST collection in September was Rs 20,578 crore, State GST Rs 26,767 crore, IGST Rs 60,911 crore.
State-wise, GST revenue grew by 29 per cent in Karnataka, 28 per cent in Gujarat, followed by Maharashtra by 22 per cent and Tamil Nadu and Andhra Pradesh by 21 per cent. Telangana registered a 25 per cent increase in revenue, while Odisha registered a sharp 40 per cent growth.
Overall, tax revenue collections may surprise at 0.7-0.9 per cent of GDP growth. However, trends in other revenue streams, namely disinvestment/loss and (pick-up) spending trends in telecom-related payments, will be crucial for fiscal management, said Madhavi Arora, principal economist, Emkay Global Financial Services.
“With the government absorbing the supply risk of Rs 1.6 trillion of the GST compensation cess to the states, technically the government’s own fiscal funding related borrowings have actually been cut by the same amount,” Arora said.
The Center had released GST compensation of Rs 22,000 crore to the states to meet their revenue gap.
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