data released by Finance Ministry It showed on Monday that GST receipts in October were 24% higher than revenues in the same month last year, and 36% higher than 2019-20. Revenue from imports of goods was 39% higher, and revenue from domestic transactions (including import of services) was higher by 19% than revenue from these sources during October 2020, the finance ministry said in a statement. This is the fourth consecutive month to cross Rs 1 lakh crore. This year April had the highest collection so far.
“This is in line with the trend of economic recovery. This is also evident from the trend of e-way bills being generated every month since the second wave,” the finance ministry said. “Revenues would still have been higher if sales of cars and other products had not been affected by the disruption in the supply of semiconductors.”
Since the lifting of restrictions following the second Covid-19 wave, revenues have been strong, thanks to an economic rebound. The mop-up has also been aided by the efforts of the state and central tax administrations, which has resulted in increased compliance over the past months, the ministry said.
It said that apart from action against individual tax evaders, this is the result of a multi-pronged approach adopted by the GST Council. Measures taken to ease compliance include enabling zero filing, quarterly return monthly payments through text messages (QRMP) system of returns and auto-population. “Overall, the impact of these efforts has ensured compliance and higher revenue… Further steps to curb fake ITC (Input Tax Credit) are under consideration. GST Council,” the ministry statement said.
Last year, GSTN – IT Backbone – has significantly increased the capability of the system to improve the user experience. The council has taken several steps to discourage non-compliance behaviour, such as blocking of e-way bills for non-filing of returns, system-based suspension of registration of taxpayers who have failed to file six consecutive returns and Blocking of credit for return defaulters.
Economists expect the healthy trend to continue in the coming months. “The six-month high GST collection of October 2021 is a reflection of healthy pickup in GST e-way bills in September 2021, led by pre-festive season stocking as well as better compliance,” Aditi said. nair, Chief Economist at Rating Agency ICRA. “With the October 2021 GST e-way bill expected to exceed the level seen last month, headline GST collections are expected to remain healthy in the range of Rs 1.25-1.35 trillion in November 2021. Overall, we expect CGST collections to be higher by Rs 500 billion from the government’s FY2022 budget estimate of Rs 5.3 trillion.
“While supply issues related to semiconductor availability may impede the performance of the GST Compensation Cess, we do not expect the budget estimate of Rs 1 trillion with Rs 0.6 trillion already raised in the first seven months of this fiscal. Will be missed.” Nair said.
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