Economists expect more collections in line with record e-way bill generation
Gross Goods and Services Tax (GST) collection in November reached ₹1,31,526 crore, the second highest since the implementation of GST in July 2017 and the second consecutive month that the collection has crossed ₹1.3 lakh crore.
Revenue for November was 25% higher than the corresponding month last year and 27% higher than the pre-pandemic levels of 2019-20. Tax collections from imports of goods were 43% higher, while revenues from domestic transactions, including imports of services, were 20% higher than their respective collections in November 2020.
However, economists said the November collections, reflecting the transactions done in October, were heavy in terms of record generation of e-way bills during October.
“These GST collections are a little less than we expected, even as the year-on-year expansion is strong,” said Aditi Nair, chief economist, ICRA. “We expected the GST collection in November to be higher than the current highest collection recorded in April 2021, given the all-time high generation of e-way bills during October,” she said.
Gross GST revenue in April was originally reported to be ₹1,41,384 crore, but data shared by the ministry on December 1 shows those collections have now been reduced to ₹1,39,708 crore from ₹1,676 crore .
Emphasizing that the November GST kitty was second only to the collections in this April, the Finance Ministry sought to set aside the importance of the former, stating that the April collections pertain to year-end revenues.
Similarly, October’s collection of ₹1.3 lakh crore includes the impact of quarterly returns, to note that November’s revenue is ‘in line with the trend of economic recovery’.
Ms Nair said the GST collection in December may be lower, as the daily average e-way bill generation in the first three weeks of November reflects a fall in production.
“The recent trend of higher GST revenue has been a result of various policy and administrative measures that have been taken in the past to improve compliance,” the ministry said in a statement. Central tax enforcement agencies have detected cases of major tax evasion. Mainly related to fake invoices.
MS Mani, partner, Deloitte India, agreed that “a significant increase in GST monitoring activities in the recent past may have also contributed to the increased collections”, even if economic growth played a role.
“The growth in collections from 18% to over 30% in key states is in line with economic revival in the states as well as increase in collections from imports of goods,” he said.
“A large number of initiatives were taken in the last one year, such as augmentation of system capacity, denial of non-filers after the last date of filing returns, auto-population of returns, blocking of e-way bills and input tax credit pass Doing. Non-filers have consistently improved in filing returns over the past few months,” the ministry said.
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