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GST collection surges to Rs 1.30 lakh cr in Oct, 2nd highest ever

This is the second highest collection of GST since its implementation on July 1, 2017.

Written by Aanchal Magazine | New Delhi |
Updated: November 2, 2021 2:33:19 am
gst, gst collections october, gst mopup october 2021, government gst collections, gst newsThe tax collections last month on goods sold and services rendered was 24 per cent higher than in October 2020. (Representative image)

Gross Goods and Services Tax (GST) revenue collections in October (for sales in September) rose 23.7 per cent year-on-year to Rs 1,30,127 crore, the second highest revenue collection under GST ever since its rollout in July 2017 and the fourth consecutive month when collections crossed the Rs 1 lakh mark.

This comes on the back of a pickup in economic activity, alongside the imposition of multiple compliance measures by tax authorities for curbing evasion.

GST collections at Rs 1,41,384 crore in April this year, accounting for year-end sales, is the highest collection so far since the rollout of the indirect tax regime.

Union Finance Minister Nirmala Sitharaman, in a Twitter post Monday, said: “GST collection for October 2021 registered the second highest since implementation of GST Rs 1,30,127 crore gross GST revenue collected in October. Revenues… of October 2021 are 24% higher than the GST revenues in the same month last year & 36% over ‘19-20.”

The Finance Ministry said this growth in collections is “very much in line with the trend in economic recovery” which is “evident from the trend in the e-way bills generated every month since the second wave”. The revenues, it said, would have been higher if the sales of cars and other products had not been affected on account of disruption in supply of semiconductors.

Gross GST revenue collected in October was Rs 1,30,127 crore, out of which CGST (the Central Goods and Services Tax which is levied on Intra State supplies of both goods and services by the Centre) is Rs 23,861 crore, SGST (tax levied on Intra State supplies of both goods and services by states) is Rs 30,421 crore, IGST (tax levied on all Inter-State supplies of goods and services) is Rs 67,361 crore (including Rs 32,998 crore collected on import of goods) and cess is Rs 8,484 crore (including Rs 699 crore collected on import of goods).

The government has settled Rs 27,310 crore to CGST and Rs 22,394 crore to SGST from IGST as regular settlement. The total revenue of Centre and the states after regular settlements in October 2021 is Rs 51,171 crore for CGST and Rs 52,815 crore for SGST.

Data released by the Finance Ministry also showed that timely payment of taxes has been increasing compared to previous months. Out of total returns filed, the share of returns for the current period filed every month has increased. In July, 1.5 crore returns were filed as taxpayers had filed returns of past months due to deadline extensions in view of Covid.

State and Central tax authorities have been taking steps to boost compliance and curb evasion. Measures have been taken to ease compliance like nil-filing through SMS, enabling Quarterly Return Monthly Payment (QRMP) system and auto-population of return, the Finance Ministry said.

Tax authorities have also taken steps to block e-way bills for non-filing of returns, system-based suspension of registration of taxpayers who have failed to file six returns in a row, and blocking of credit for return defaulters.

For GST revenues collected in the respective regions, states such as Maharashtra posted 23 per cent growth in GST revenues in October, Tamil Nadu 11 per cent growth, Gujarat 25 per cent growth and Karnataka 18 per cent growth.

Tax experts said the uptrend in GST revenues is likely to continue in coming months due to the festive season.

Abhishek Jain, Tax Partner, EY India, said: “The robust GST collections are quite encouraging and a clear sign of economic recovery. With the ongoing festive season, we can expect similar or even higher GST collections in the coming months.”

Devendra Kumar Pant, Chief Economist, India Ratings and Research, said: “GST collections since June 2021 are showing a gradual improving trend, which is a good sign for the economy. GST collections for the month of October (reported) were collected in the month of September and are affected by the seasonality of pre-festive season buying. Nonetheless, the trend is encouraging.”

“The Union government has budgeted for Rs 5.30 trillion GST collections for FY22, and in the first half of FY22, it has already collected Rs 2.66 trillion… Even a 10% growth in GST collection in the remaining five months (November-March) will lead to the Union government’s GST collections growing by 30%, Rs 632.9 billion higher than FY22 (budgeted target),” he said.

While the higher GST collections could help in meeting budget targets, the government may introduce more measures to curb evasion.

MS Mani, Senior Director, Deloitte India, said: “If the robust GST collections seen in the current fiscal continue on the back of a sustained growth of the economy, it would be likely that the GST collection targets for the year would be exceeded. This would provide some fiscal space to absorb the increased healthcare costs etc… in addition to the various measures to streamline return filings, e-way bill generation etc, several restrictions placed on non-compliant taxpayers would also have resulted in many taxpayers gradually becoming more compliant and paying GST and filing returns promptly. Going forward, we may see more checks and balances being introduced to encourage filers and dissuade non-filers.”

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