Consumption and compliance helped the government collect ₹1.68-lakh crore through Goods and Services Tax (GST) in November. The collections this month are 15 per cent higher than in November last year. However, the number is lower than 1.72-lakh crore in October, which was the second highest collection ever since the GST rollout. The mop-up in November marks the ninth consecutive month where monthly GST collections have consistently surpassed the ₹1.5-lakh crore threshold.

“During the month, the revenues from domestic transactions (including imports of services) were 20 per cent higher than the revenues from these sources during the same month last year,” said the Finance Ministry in a statement on Friday. During the current fiscal, out of 8 months, 6 months saw collections over ₹1.60-lakh crore. Experts believe that the rising trend in GST collection necessitates rate rationalisation, which is long overdue.

Inherent growth

MS Mani, Partner with Deloitte, said the numbers reflect the inherent growth in production and consumption, as they are a good barometer of the state of the economy. “Significant efforts made by the tax authorities to improve compliance and deter evasion are also resulting in more businesses coming under the GST net,” he said. The latest number of registered tax payers is 1.43 crore.

Vivek Jalan, Partner with Tax Connect Advisory, added that newer tools of compliance helped in higher collections. “Notice issuing time for the year 2017-18 has expired on September 30, 2023, and for FY19, it will lapse in December 2023. Due to this, the GST department has seen heightened activity this fiscal. This has resulted in burgeoning revenues as demands are issued by the department and pre-deposits are collected, even as taxpayers go to appeals,” he said.

Experts also credited technology for the collection. “The GST department using AI tools has been very successful in curbing and detecting tax evasion. All this has led to an increase in GST collections,” Parag Mehta, Partner, Indirect Tax, N.A. Shah Associates, said.

The bigger States recorded substantial increases. The rate of growth in Maharashtra was 18 per cent while it was 17 per cent in Karnataka and Gujarat. According to Jalan, there is competition among state GST departments. For example, Telangana would always try to compete with West Bengal and hold that even though its consumer base is smaller, its GST revenues are higher, he said.

Experts thought the timing was opportune for reforms. Mani said: “The stability shown in the GST collections would give the policymakers the confidence to move ahead with the next phase of GST reforms.” Mehta said it is the right time to rationalise the GST slabs for various goods, which has been a point of discussion for a long time. “It will be beneficial to the market as well as the government. We’ll continue to see such good GST Collections henceforth as well,” he said