Indicating a firming of economic recovery and better compliance, the total Goods and Services Tax (GST) collections in February reached over ₹1.13-lakh crore. The collection in February was 7 per cent higher than in the corresponding month of the last fiscal year.
According to the Finance Ministry, collection of over ₹1.1-lakh crore for the third month in a row and over ₹1-lakh crore for five consecutive months is proof of economic recovery.
“During the month, revenue from import of goods was up 15 per cent and that from domestic transactions (including import of services) 5 per cent higher than the revenue from these sources during the same month last year,” a Finance Ministry statement said.
MS Mani, Senior Director at Deloitte India, said that in addition to the stabilisation of economic activity, the continuing trend of high GST collections for the past few months is on account of the data analytics approach adopted by the authorities thathas led to significant detection of evasion and incorrect ITC use.
“With the gradual opening up of the services sector, economic activity is expected to pick up leading to improved collections in the next month as well,” he said.
According to Aditi Nayar, Principal Economist with ICRA, a favourable base effect is likely to result in the CGST collections expanding by 18-23 per cent in March 2021. However, the settlement of IGST of ₹48,000 crore between the Centre and the States will adversely impact the net CGST-plus-IGST revenues of the Centre in February, resulting in a moderation in the growth of its gross and net tax revenues in that month, she said.
Analysis of February data showed that all big States registered a growth. In Maharashtra, the collection increased 2 per cent to over ₹16,000 crore while Gujarat’s jumped 14 per cent to ₹8,200 crore. Karnataka registered a growth of 2 per cent with a mop-up of more than ₹7,500 crore, while Tamil Nadu saw an increase of 9 per cent at over ₹7,000 crore.