GST collections crossed the Rs 1 lakh crore mark for the seventh month in a row and touched a record high of over Rs 1.41 lakh crore in April, indicating economic recovery, the Finance Ministry said on Saturday.
The Goods and Services Tax (GST) collections, which directly reflect the state of economic activity, in April are 14 per cent higher than Rs 1.23 lakh crore mopped up in March. In April last year, the revenue had plummeted to a record low of Rs 32,172 crore, after the government imposed a nationwide lockdown to curb the spread of coronavirus.As economic activity picked up, GST collections started crossing the Rs 1 lakh crore mark since October last year.
The gross GST revenue collected in the month of April 2021 is at a record high of Rs 1,41,384 crore, of which CGST is Rs 27,837 crore, SGST Rs 35,621 crore, IGST Rs 68,481 crore (including Rs 29,599 crore collected on import of goods) and cess Rs 9,445 crore (including Rs 981 crore collected on import of goods). During April, revenues from domestic transaction (including import of services) are 21 per cent higher than in March.
“GST revenues have not only crossed the Rs 1 lakh crore mark successively for the last seven months but have also shown a steady increase. These are clear indicators of sustained economic recovery during this period. Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, income-tax and customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue,” the ministry said.
Tax experts, however, said that since the April collections reflect economic activity in March, the GST mop-up in the coming months could see decline owing to lockdowns in certain parts of the country to curb surge in Covid cases.
Deloitte India Senior Director M S Mani said, “The all-time high collections which relate to supplies made in March 2021 could now give way to muted collections in the coming months due to the lower economic activities in April.” Shardul Amarchand Mangaldas & Co. Partner Rajat Bose said the collection figures for April represent the tax collected towards transactions done in the month of March 2021.
“Since its the year end, most companies close their books and raise invoices during the financial close.” That is perhaps one of the reasons for the spurt in GST collections in April, Bose said adding “the real challenge lies ahead as most parts of the country are again in a lockdown and most industries are temporarily shut.”
AMRG & Associates Senior Partner Rajat Mohan said the high growth trajectory in GST collection is bound to nosedive in the coming few months owing to second wave of COVID infections that have given alarming rate of transmission and the country is in the middle of lockdown situation.
EY Tax Partner Abhishek Jain said that “with certain parts of the country facing lockdown due to the surge in Covid cases, the collections may experience a decline in the coming months”.