GST collections hit new high in March

Finance Ministry calls it an indicator of a ‘faster recovery’

India’s gross Goods and Services Tax (GST) collections hit a record ₹1,42,095 crore in March, surpassing the January high of ₹1,40,986 crore and lifting the Centre’s projected gross tax revenues for 2021-22 significantly above the government’s revised estimates.

The March GST revenues, for transactions undertaken in February, were 15% higher than the same month last year and 46% higher than the collections in March 2020. Revenues from import of goods were 25% higher and the revenues from domestic transactions, including import of services, were 11% higher than a year earlier.

The Finance Ministry asserted that the highest ever monthly GST kitty indicated that a faster recovery was underway in business activity, pointing to the fact that the number of e-way bills generated in February exceeded January’s 6.88 crore figure by three lakh ‘despite being a shorter month’.

The last quarter of 2021-22 clocked average monthly collections of ₹1.38 lakh crore, compared with ₹1.3 lakh crore in the preceding quarter. The average was significantly lower in the first and second quarters of the last fiscal year, at ₹1.1 lakh crore and ₹1.15 lakh crore, respectively. Apart from the economic recovery, the ministry said that ‘anti-evasion activities against fake billers’ had also helped bolster GST collections.

“The record GST collections have also been aided by the strong sales activity of corporates in March, as they race to close the financial year with high growth,” said M.S. Mani, partner at Deloitte India.

ICRA chief economist Aditi Nayar reckoned that GST revenues would rise further in April, thanks to improved economic activity and year-end adjustments, adding that the kitty collected in March was in line with the resurgence in e-way bill generation. 

“Higher GST collections, in addition to customs duty revenues driven by the rebound in gold imports in February, combined with direct taxes, are likely to have pushed up the Government of India’s gross tax revenues well above the revised estimates for the year,” Ms. Nayar said, positing that actual collections would have likely ‘overshot’ the ₹27.6 lakh crore revised estimate by a considerable ₹2.25 lakh crore.