GST collections cross 1 lakh crores; What does it mean?
According to data released by the finance ministry’s Department of Revenue, GST collections for the month of September, which were released at the end of October, breached the psychologically significant 1 lakh crore mark, recovering from the precipitous fall in April brought on by the pandemic. At that time the filings had fallen to Rs 32,172 crores from Rs 97,590 crores in March. The only time the numbers were as worse was in the month of the GST’s introduction in July 2017.
The recent numbers stood at Rs 1,05,155 crores, a 10% increase over the previous month. The last time the state had reported comparable numbers was in February this year when the collections were at Rs 1,05,363 crores. This followed strong start-of-year filings of Rs 1,10,818, only the second-highest peak to be recorded since GST was rolled out.
Among the states and union territories, Maharashtra was the highest contributor to GST, collecting more than twice the second-highest state. Other major contributors were Karnataka, Tamil Nadu, Gujarat, Uttar Pradesh and Haryana.
The government has heralded this as a sign of recovery. Some experts are cautious. Vivek Kaul, author and a commentator on the Indian economy, has attributed this rise to the fact that, due to the pandemic, a fair share of consumption has moved online and digital transactions have gone up. “So the chances of GST getting captured and paid are much better,” he says.
It should also be noted that September was the last month of the relaxation period given to taxpayers with a turnover of less than Rs 5 crore to file their returns. There are other factors at play as well, like the inventory built up by auto retailers in the last month in anticipation of festival sales.
“So whether this signifies an economic rebound, it’s difficult to say from this one month alone. We can only say this after looking at the data for the next three months and seeing if it sustains,” says Kaul. At any rate, he says he has more trust in the GST data that is put out by the Controller General of Accounts which does the accounting for the Indian government.
Perhaps because it comes one month after the numbers from the Ministry of Finance are released, he feels it is better accounted for. “There is a lot of marketing behind the finance ministry numbers. CGA data, on the other hand, is put out quietly and that’s what goes into the budget”.