GST collections crossed the Rs 1 lakh crore-mark for the fifth month in a row in February, rising 7 per cent yearly to over Rs 1.13 lakh crore, indicating financial restoration, the finance ministry mentioned on Monday. Goods and Services Tax (GST) collections had risen for two straight months to contact file Rs 1,19,875 crore in January and Rs 1.15 lakh crore in December.
The gross GST income collected February 2021 is Rs 1,13,143 crore, of which Central GST is Rs 21,092 crore, State GST is Rs 27,273 crore, Integrated GST is Rs 55,253 crore (together with Rs 24,382 crore collected on import of products) and Cess is Rs 9,525 crore (together with Rs 660 crore collected on import of products).
GST income in February final 12 months was Rs 1.05 lakh crore.
“In line with the development of restoration in the GST revenues over previous 5 months, the revenues for the month of February 2021 are 7 per cent greater than the GST revenues in the identical month final 12 months.
“During the month, revenues from import of goods were 15 per cent higher and the revenues from the domestic transaction (including import of services) are 5 per cent higher than the revenues from these sources during the same month last year,” the ministry mentioned in an announcement.
GST revenues surpassed Rs 1 lakh crore-mark fifth time in a row and crossed Rs 1.1 lakh crore for the third consecutive month post-pandemic. This is a transparent indication of the financial restoration and the influence of assorted measures taken by tax administration to enhance compliance, the ministry mentioned.
GST collections, which instantly mirror the state of financial exercise, had plummeted to a file low of Rs 32,172 crore in April 2020, after the federal government imposed a nationwide lockdown to curb the unfold of coronavirus.
Meanwhile, the finance ministry has launched Rs 1.04 lakh crore GST compensation to states since October to meet the shortfall in income.
The lockdown, categorised by a number of companies as one of many strictest in the world, pummelled the financial system as demand dried up and non-essential companies had been shuttered.
In the April-June quarter, the financial system contracted by the steepest ever 24.4 per cent, and seven.3 per cent in the September quarter. However, in October-December it got here again in constructive territory with 0.4 per cent progress.
As restrictions had been step by step lifted, many components of the financial system had been ready to spring again into motion, though output stays nicely under the pre-pandemic ranges.
Icra Principal Economist Aditi Nayar mentioned whereas the expansion of GST collections eased mildly in February 2021, it remained wholesome, in line with the consolidation in the momentum of financial exercise noticed throughout a wide range of lead indicators. Subsequently, a beneficial base impact is probably going to outcome in the CGST collections increasing by 18-23 per cent in March 2021.
Deloitte India Senior Director M S Mani mentioned, “In addition to the stabilisation of economic activities, the continuing trend of high GST collections for the past few months is also on account of the data analytics approach adopted by the authorities, which has led to significant detection of evasion and incorrect ITC availment. With the gradual opening up of the services sectors, economic activity is expected to pick up, leading to improved collections in the next month as well”.
Shardul Amarchand Mangaldas & Co Partner Rajat Bose mentioned the varied measures taken by the federal government to guarantee compliance additionally appears to be paying off.
“Hopefully, the worst is over and this should definitely bring a cheer to the government which desperately needs the fiscal resources to implement its policy commitments.”
PwC India Partner & Leader, Indirect Tax, Pratik Jain mentioned: “It is expected that the trend of increasing GST collection would continue as we approach the financial year-end and audits become more rigorous. This should give much-needed confidence to the government to consider rate rationalisation”.