NEW DELHI : Central and state governments collected ？1.12 trillion in goods and services tax (GST) in August, a 30% improvement over the receipts in the same month a year ago, the finance ministry said on Wednesday.
This is the second straight month of GST collection staying above ？1.1 trillion after falling below that mark in June as mobility restrictions in parts of the country affected sales in May. Before June, GST receipts stayed above the ？1 trillion mark for nine months in a row.
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The indirect tax collections staying above the trillion-rupee mark indicate economic activity is gradually reviving after the devastating second covid wave. The collections are expected to increase further as India enters the festival season when people make big-ticket purchases. “With the easing of covid restrictions, GST collection for July and August have again crossed ？1 trillion, which indicates the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, especially action against fake billers, have also been contributing to enhanced GST collections. Robust revenues are likely to continue in the coming months, too," the finance ministry said.
After settlement, the Centre received ？55,565 crore and states ？57,744 crore in August.
Compared to the ？98,202 crore revenue collected in August 2019 —the period before the pandemic gripped the nation—the latest figure shows a growth of 14%, the statement said.
M.S. Mani, senior director at Deloitte India, said most of the key manufacturing states showed an increase of 25% to 35% in collections when compared with the same period last year, indicating that the economic recovery may be faster in the current year.
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GST receipts in August represent sales in July. Meanwhile, two separate early indicators—IHS Markit India Manufacturing Purchasing Managers’ Index and e-way bill data—suggested a limited positive trend as far as economic activity in August, and the resultant GST collections in September are concerned.
Data from GSTN, the company that processes tax returns, showed that up to 30 August, daily average e-way bills raised stood at 2.1 million, about 2% more than what was reported in July. This suggested that goods transportation within and across states is stabilizing and GST revenue for the Centre and states is likely to maintain the current level in September.
E-way bill data gives an early peek into the level of goods transactions taking place in the economy.
Abhishek Jain, tax partner at EY, said that with the increasing rate of vaccination and business supplies picking up, the uptrend in GST receipts is expected to continue in the coming months.
IHS Markit said on Wednesday that the manufacturing sector in India continued its recovery for the second straight month in August after the contraction seen in June
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