Goods and services tax (GST) collected in October rose to Rs 1.3 trillion, which is 24 per cent higher than in the same period a year ago, and 36 per cent more than the collection in the pre-Covid year of 2019-20.

       This is the second highest collection since the introduction of new indirect regime in 2017. All time high collection figure was over Rs 1.40 trillion in April this year.

       The finance ministry expects the positive trend to continue and that the second half of the year will post higher revenues. It said the constant rise in collection the past five months indicates the economy is recovering faster.

       During the month, revenue from import of goods was up 39 per cent and that from domestic transactions (including import of services) was 19 per cent higher than the revenues from these sources during the same month last year.

       “This is very much in line with the trend in economic recovery. This is also evident from the trend in the e-way bills generated every month since the second wave. The revenues would have still been higher if the sales of cars and other products had not been affected on account of disruption in supply of semiconductors,” the ministry said on Monday.

       Further it said that collections have also been aided due to the efforts of the State and Central tax administration resulting in increased compliance over previous months. In addition to action against individual tax evaders, this has been a result of the multi-pronged approach followed by the GST Council.

       Abhishek Jain, tax partner, EY, says "The robust GST collections are quite encouraging and a clear sign of economic recovery. With the ongoing festive season, we can expect similar or even higher GST collections in the coming months".

       “On one hand, various measures have been taken to ease compliance like nil filing through SMS, enabling Quarterly Return Monthly Payment (QRMP) system and auto-population of return.

       During the past one year, GSTN has augmented the system capacity considerably to improve user experience. On the other hand, the Council has also taken various steps to discourage non-compliant behaviour, like blocking of e-way bills for non-filing of returns, system-based suspension of registration of taxpayers who have failed to file six returns in a row and blocking of credit for return defaulters,” the ministry highlighted.

       MS Mani, senior director, Deloitte India said, "The impressive GST collections have resulted from a combination of sustained economic growth and continuing policy initiatives to improve compliance and discourage evasion."

       "If the robust GST collections seen in the current fiscal continue on the back of a sustained growth of the economy, it would be likely that the GST collection targets for the year would be exceeded. This would provide some fiscal space to absorb the increased healthcare costs etc." he said

       In addition to the various measures to streamline return filings, e-way bill generation etc , several restrictions placed on non-compliant taxpayers would also have resulted in many taxpayers gradually becoming more compliant and paying GST and filing returns promptly. Going forward, we may see more checks and balances being introduced to encourage filers and dissuade non-filers, Mani explained.