New Delhi : Central and state governments gathered ₹1.12 trillion in goods and services tax (GST) in August, a 30% improvement in receipts in the same month a year ago, the finance ministry said on Wednesday.
This is the second consecutive month of GST collection by staying up ₹1.1 trillion after falling below that mark in June, as mobility restrictions in parts of the country hit sales in May. Before June, GST receipts remained above ₹1 trillion mark for nine consecutive months.
Indirect tax collections staying above the trillion-rupee mark indicate that economic activity is slowly reviving after the disastrous second Covid wave. The collection is expected to increase further as India enters the festive season when people shop for big tickets. “With the easing of Covid restrictions, the GST collections for July and August have again exceeded ₹1 trillion, which indicates that the economy is recovering at a fast pace. Along with economic growth, anti-theft activities, especially crackdown on counterfeit billers, are also contributing to the growth in GST collections. The Finance Ministry said strong revenues are likely to continue in the coming months as well.
Center got after settlement ₹55,565 crore and states ₹57,744 crore in August.
Compared to ₹98,202 crore revenue was collected in August 2019 – the period before the pandemic gripped the country – the latest figure showing an increase of 14%, the statement said.
MS Mani, senior director, Deloitte India, said most major manufacturing states have shown a 25% to 35% increase in collections compared to the same period last year, indicating that the economic recovery may accelerate in the current year.
GST receipts in August represent sales in July. Meanwhile, two separate preliminary indicators—the IHS Markit India Manufacturing Purchasing Managers’ Index and e-way bill data—suggested a limited positive trend as economic activity in August, and the resultant GST collection in September, is concerned.
Data from GSTN, a tax return processing company, shows that as of August 30, the daily average e-way bills raised were 2.1 million, which was almost 2% higher than what was reported in July. It suggested that goods transport within and across states is stabilizing and GST revenue for the Center and states is likely to maintain the current level in September.
E-way bill data gives an early glimpse of the level of goods transactions taking place in the economy.
Abhishek Jain, Tax Partner at EY said that with increasing vaccination rates and accelerating commercial supplies, GST receipts are expected to continue to rise in the coming months.
IHS Markit on Wednesday said the manufacturing sector in India continued its recovery for the second consecutive month in August after the contraction seen in June.
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