June's GST revenues second highest at over ₹1.44 lakh crore

Cess inflows hit record; Inflation, low base from second COVID wave abet 56% year-on-year surge in kitty

India recorded its second highest monthly gross GST revenues in June at ₹144,616 crore, 56% more than a year ago when the 2nd COVID wave had hit economic activity. Revenues from import of goods rose 55%, while domestic transactions and import of services were 56% higher in the month.

Gross GST Compensation Cess collections hit ₹11,018 crore, including ₹1,197 crore collected on import of goods, the highest level since the introduction of GST five years ago. This is the fourth successive month since March that monthly GST revenues have crossed the ₹1.40 lakh crore mark, and the fifth such occasion overall.

“The average monthly gross GST collection for the first quarter of 2022-23 has been ₹1.51 lakh crore against the average monthly collection of ₹1.10 lakh crore in the same quarter last year, showing an increase of 37%. Coupled with economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST,” the Finance Ministry said.

Rating agency ICRA said it expects the monthly average GST collections in 2022-23 to be around June’s revenue level, which would imply a ‘substantive upside of about ₹1.2 lakh crore’ for the Government of India relative to its Budget Estimates for Central GST of ₹6.6 lakh crore.

“The sharp 56% headline growth in June benefits from the economic recovery, and has also been boosted by the low base of the second wave of Covid-19 and the transmission of elevated commodity prices into output inflation,” said ICRA chief economist Aditi Nayar.

Central GST collections in June were ₹25,306 crore, State GST at ₹32,406 crore, while Integrated GST accounted for ₹75,887 crore, including ₹40,102 crore collected on import of goods. GST revenues had hit a high of ₹1,67,540 crore in April this year, before dropping to about ₹1.41 lakh crore in May.

“These consistent high collections indicate recovery from the pandemic hit and can also be attributed to inflation and tight check and balances implemented by the Government,” said Abhishek Jain, partner (indirect tax) at KPMG India.