Gross revenues from the Goods and Services Tax (GST) hit a record high in December 2020, with collections of ₹1,15,174 crore, 12% higher than a year ago and 9.7% greater than the previous month’s inflows.
December marks the fourth month in a row that GST collections have grown year-on-year, after revenues had collapsed in the first quarter of 2020-21 amidst the COVID-19 lockdown.
The government said the highest monthly GST kitty since the introduction of the indirect tax in 2017, was a reflection of a rapid economic recovery underway. It also attributed part of the gains to better compliance following an official crackdown on malpractices to weed out taxpayers evading GST or using fake bills to defraud the exchequer.
“During the month, revenues from import of goods was 27% higher and the revenues from domestic transactions (including import of serviices) are 8% higher that the revenues from these sources during the same month last year,” the Department of Revenue in the Finance Ministry said in a statement on Friday.
The 12% year-on-year growth recorded in December was the highest rate in 21 months.
“This has been due to the combined effect of the rapid economic recovery post pandemic and the nation-wide drive against GST evaders and fake bills alongwith many systemic changes introduced recently, which have led to improved compliance,” the statement said.
“This shows industry is bouncing back to normalcy,” said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII), pointing to the increase in revenue from import of goods as an indicator that the economy is on the ‘fast track of growth now after a long dip due to COVID lockdown’,
Abhishek Jain, tax partner at EY, also said collections crossing 1.15 lakh crore for the first time despite the persistence of the pandemic, suggests a recovery in the economy, even though administrative changes to the system also helped.
“Some of it could also be due to the plugging of GST revenue leakage by the government on account of fake credits through fradulent invoicing and introduction of e-invoicing,” he said.
Among the States, Odisha recorded a 20% growth in GST revenues in December, followed by Rajasthan (16%), Andhra Pradesh (14%) and Gujarat (13%). Revenues grew by 11% in Jharkhand, 10% in West Bengal and Chhatisgarh, and 8% in the States of Tamil Nadu, Kerala, Karnataka and Uttar Pradesh.
Till now, the highest monthly GST collections were recorded in April 2019 with about ₹1.14 lakh crore. The Finance Ministry said that April revenues normally tend to be high since they pertain to the returns filed for activity in March, which marks the end of the financial year.