Collection from Goods & Services Tax (GST) in February dipped to ₹1.33 lakh crore from ₹1.40 lakh crore in January. However, the good news is that the collection crossed ₹1.30 lakh crore for the 5th time.
“February, being a 28-day month, normally witnesses revenues lower than in January,” a Finance Ministry statement said. Still, it said that collection has been high in February and it should also be seen in the context of partial lockdowns, weekend and night curfews and various restrictions that were put in place by various States due to the Omicron wave, which peaked around January 20.
As GST is a consumption-based tax, increase in collection also shows improvement in demand. However, the collection could have been higher if services sector had improved more. Experts expect more collection in March which, in turn, will have overall Budget estimate for fiscal year 2021-22
Since implementation of GST, for the first time, GST cess collection crossed ₹10,000 crore mark, which signifies recovery of certain key sectors, especially automobile sales. The revenues for February are 18 per cent higher than the corresponding month of last fiscal and 26 per cent higher than the GST revenues in February 2020. During the month, revenues from import of goods were 38 per cent higher and the revenues from domestic transactions (including import of services) are 12 per cent higher than revenues from these sources during the same month last year.
Economy at pre-Covid levels
MS Mani, Partner with Deloitte India, said that collections exceeding ₹1.33 lakh crore despite the challenging pandemic situation in January-22 indicates that collections are now on a stable trajectory and the FY22 targets would be exceeded. “While on an overall basis, the collections are 18 per cent higher than the same period last year, there is significant divergence amongst States with increases in the range of 2 per cent to 23 per cent amongst the large States,” he said.
Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co, said that the GST collection for last month is a clear indicator that the economy has reached the pre-Covid levels. “The increase in GST collections can be attributed to increase in overall GST compliance and a crackdown on fraudulent practices,” he said.
E-way bill
Meanwhile, e-way bill generation has seen good improvement in the month of February as average daily generation rose to over 24.26 lakh as against 22.20 lakh in January. As on February 27, over 6.60 crore e-way bills had been generated during the month. A week before that, the number was over 4.76 crore.
E-way bill is required to be generated for the movement of goods, if the value of goods is ₹50,000 or more. It is kind of proof that tax has been paid on the goods being taken from one State to another or even from one city to another within a State