Boosted by a strong increase in domestic demand, collection through Goods & Services Tax (GST) touched an all-time high of ₹2.10 lakh crore in April. This is the first time that collection has crossed ₹2 lakh crore since the introduction of the new tax regime on July 1, 2017.

Collection in April is related with goods consumed and serviced, availed in the month of March. Traditionally, March is also the month when stock is cleared so that the new fiscal year begins with fresh stock. This also results in more and more movement of goods, which in turn contributes to higher collection. It may be noted that April has always seen record collection.

According to a Finance Ministry statement, collection of ₹2.10 lakh crore “represents a significant 12.4 per cent year-on-year growth, driven by a strong increase in domestic transactions (up 13.4 per cent) and imports (up 8.3 per cent).“ After accounting for refunds, the net GST revenue for April 2024 stood at ₹1.92 lakh crore, reflecting an impressive 17.1 per cent growth compared to the same period last year.

According to Vivek Jalan, Partner at Tax Connect Advisory Services LLP, since July 2017, when GST started with an average monthly revenue of around ₹0.9 lakh crore, to April 2024, when it grossed ₹2.1 lakh crore, GST revenues have witnessed an approx. growth of 13 per cent per annum on average. Considering inflation of 5 per cent and GDP growth of 7 per cent, there has been an average buoyancy of 1 per cent on average per annum over the last seven years, which has also witnessed a two-year unprecedented slump in terms of Covid-19 lockdowns.

It showed “among other factors, that the Indian Economy is on a fast track to formalization and businesses are fast becoming organized and are coming into the mainstream. The Economy is thus getting set for a Big Bang Final Budget in July 2024 and looking towards bringing Alcohol, petrol, diesel and real estate under GST on the one hand and implementation of The Direct Tax Code replacing the Age Old Income Tax Act on the other hand along with implementation of the Global Minimum Tax,” he said.