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Finance Ministry terms record collections, aided by year-end adjustments, a sign of ‘faster recovery’
Finance Ministry terms record collections, aided by year-end adjustments, a sign of ‘faster recovery’
India’s gross Goods and Services Tax (GST) revenues hit a fresh high of ₹1,67,540 crore in April, with revenues from goods imports rising 30% year-on-year and domestic transactions along with services imports rising 17%.
Overall GST revenues were 20% higher than a year ago, and 17.9% higher than March 2022 collections of ₹1,42,095 crore. The Finance Ministry said that April’s revenues for transactions undertaken in March, reflect a ‘faster recovery’ of business activity, with 7.7 crore e-way bills generated in March, 13% higher than February 2022. “For the first time, gross GST collection has crossed Rs 1.5 lakh crore mark,” it said.
“While the GST collections in respect of March have always been high, the record collections are on account of multiple favourable factors, including the recent changes on permitting input tax credits only upon timely compliance by the vendors,” said Deloitte India partner M.S. Mani.
“Even though the spike in April’s GST collections partly benefits from year-end adjustments, the all-time high magnitude of inflows is very enthusing, and augurs well for a robust year on year growth in the months ahead as well,” said ICRA chief economist Aditi Nayar, adding there is evidence of a healthy pace of economic activity in March despite the escalating geopolitical conflict in Europe.
Central GST revenues constituted ₹33,159 crore of April’s gross revenues from the tax, while State GST accounted for ₹41,793 crore and Integrated GST made up ₹81,939 crore, including ₹36,705 crore on import of goods.
GST Compensation Cess collections, used to recompense States, grew 13.08% in April over March collections, to touch ₹10,649 crore. The cess collections included ₹857 crore collected on import of goods, marking a 8.9% decline from the ₹941 crore cess from import of goods in March.
There were, however, wide variations in growth trends across States. While Tamil Nadu’s collections grew just 10% in April, Maharashtra saw collections rise by 25%, Odisha 28% Haryana 23% and Andhra Pradesh 22%. Karnataka and Rajasthan recorded a 19% uptick in GST collections, while the growth rate was 17% for Gujarat, and 16% for Telangana, Uttar Pradesh and Delhi.
Six States and Union Territories reported a contraction in revenues from a year ago, including Bihar (-2%), Manipur (-33%), Mizoram (-19%) and Tripura (-3%). GST inflows from Lakshwadeep tanked 18% year-on-year, while those in Daman and Diu dropped a sharp 78%.
“The government has settled ₹33,423 crore to CGST and ₹26962 crore to SGST from IGST. The total revenue of Centre and the States in the month of April 2022 after regular settlement is ₹66,582 crore for CGST and ₹68,755 crore for the SGST,” the Ministry said.
“This shows clear improvement in the compliance behaviour, which has been a result of various measures taken by the tax administration to nudge taxpayers to file returns timely, to making compliance easier and smoother and strict enforcement action taken against errant taxpayers identified based on data analytics and artificial intelligence,” the Ministry said in a statement.
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