New Delhi: India’s gross GST revenue collection remained above the psychological mark of Rs 1 lakh crore for the second consecutive month, clocking Rs 1,12,020 crore in August 2021, as economic activity picked up pace post the second wave of the pandemic.
Though the GST revenues during August 2021 were a tad lower than the over Rs 1.16 lakh crore collections recorded in the previous month, it had maintained pace after the fall witnessed in June when collections fell to Rs 92,849 crore. So far this year, collections touched a record high of Rs 1.41 lakh crore collection in April and Rs 1.04 lakh crore in May.
Most tax experts feel that with the economy on the path of recovery and GDP growth in Q1 FY22 also reaching a high of 20.1 per cent, GST collections are expected to maintain momentum through the fiscal, reducing the Centre’s requirement to borrow more to meet the compensation needs of states on account of tax collection shortfall.
“The revenues for the month of August 2021 are 30 per cent higher than the GST revenues in the same month last year,” a Finance Ministry statement said.
“GST collection, after posting above Rs 1 lakh crore mark for nine months in a row, dropped below Rs 1 lakh crore in June 2021 due to the second wave of Covid. With the easing out of Covid restrictions, the GST collections for July and August 2021 have again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace,” the statement added.
According to the statement, the gross GST revenue collected in the month of August 2021 is Rs 1,12,020 crore of which the CGST is Rs 20,522 crore, the SGST is Rs 26,605 crore, the IGST is Rs 56,247 crore (including Rs 26,884 crore collected on import of goods), and cess is Rs 8,646 crore (including Rs 646 crore collected on import of goods).
“The GST collections are impressive as they are above Rs 1 lakh crore for several months in succession. Most of the key manufacturing states have shown an increase of 25 to 35 per cent in collections compared to the same period last year, indicating that the economic recovery may be faster in the current year,” Deloitte India’s Senior Director M.S. Mani said.
The government has settled Rs 23,043 crore to the CGST and Rs 19,139 crore to the SGST from the IGST as regular settlement. In addition, it has also settled Rs 24,000 crore as IGST ad-hoc settlement in the ratio of 50:50 between the Centre and states/UTs.
The total revenue of the Centre and the states after regular and ad-hoc settlements in the month of August 2021 is Rs 55,565 crore for the 0CGST, and Rs 57,744 crore for the SGST.
During the month, the revenues from the domestic transactions (including import of services) are 27 per cent higher than the revenues from these sources during the same month last year. Even as compared to the August revenues in 2019-20 of Rs 98,202 crore, this is a growth of 14 per cent.
Coupled with economic growth, anti-evasion activities, especially action against fake billers have also been contributing to the enhanced GST collections. The robust GST revenues are likely to continue in the coming months too, the Finance Ministry said.
ICRA Chief Economist Aditi Nayar said that the dip in the GST collections to Rs 1.12 lakh crore in August 2021 from Rs 1.16 lakh crore in July 2021 has belied the healthy improvement in the GST e-way bills to a daily average of 2.1 million in July 2021 from 1.8 million in June 2021, which was reflective of the lifting of restrictions, especially across the southern states.
“Nevertheless, the GST collections remain healthy at well above Rs 1.0 lakh crore, the YoY growth is as high as 30 per cent, and the ad hoc settlement of unapportioned IGST will also help to ease the cash flows of the Centre and the states,” she said.
“The GST collections for the month of August is very encouraging for the economy. What is heartening to see is that manufacturing states such as Maharashtra, Karnataka and Tamil Nadu have shown an increase of over 30 per cent as compared to last year which is a sure shot sign of economic recovery,” Shardul Amarchand Mangaldas & Co Partner Rajat Bose said.