GROSS Goods and Services Tax (GST) collections touched a record high of Rs 1.41 lakh crore in April, surpassing the previous high of Rs 1.23 lakh crore in March. The April collections, which account for sales in March, mark the seventh month where the monthly GST collections have crossed the Rs 1-lakh-crore mark. GST revenue had dipped to an all-time low of Rs 32,172 crore in April 2020.
Being the last month of the financial year, March conventionally sees a pickup in tax collections. “Despite the second wave of COVID-19 pandemic affecting several parts of the country, Indian businesses have once again shown remarkable resilience by not only complying with the return filing requirements but also paying their GST dues in a timely manner during the month,” the Finance Ministry said in a statement.
Though collections from the services sector have been impacted due to localised lockdowns in view of the second wave of the COVID-19 pandemic, the impact has been outweighed from the increased compliance from the organised sector. This has happened as the nature of the pandemic has pushed the smaller, unorganised sector players across several sectors out of business. Their share of business has moved to the bigger, organised sector players. This has meant more tax revenues, since almost all bigger players are under the tax net.
Also, the continuing influence of lockdowns through much of last year and since early this year has meant that consumers are forced to shift towards ordering from online channels, which essentially source from organised sector players. So there’s also a demand side pull in favour of items manufactured by organised sector players. Online trade channels are skewed in favour of products manufactured by big businesses. This seems to have compensated for the fall in services sector taxation revenues.
The government has also been closely monitoring compliance and taking steps to curb evasion. “Closer monitoring against fake-billing, deep data analytics using data from multiple sources including GST, Income-tax and Customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue,” the statement said.
The gross GST revenue collected in April 2021 stood at Rs 1,41,384 crore, of which central GST is Rs 27,837 crore, state GST is Rs 35,621 crore, integrated GST is Rs 68,481 crore (including Rs 29,599 crore collected on import of goods) and cess is Rs 9,445 crore (including Rs 981 crore collected on import of goods).
Going ahead, the GST collections are unlikely to sustain this trend. A significantly lower level of economic activity in April is expected to give way to muted collections in the coming months, experts said.
The government, on the other hand, is expected to take more steps towards improving compliance and curb evasion. M.S. Mani, Senior Director, Deloitte India said, “The all-time high collections which relate to supplies made in March ‘21 could now give way to muted collections in the coming months due to the lower economic activities in April. The continuing focus on improving compliance and the steps taken to curb evasion appears to be significantly improving the GST collections.”