GST mop-up at Rs 1.13L crore in February

Gross goods and services tax (GST) collections came in at Rs 1,13,143 crore in February, 7% higher than in the year-ago month, official data showed on Monday, indicating that a recent surge in transactions in the economy was sustained through January.

From a monthly low of just over Rs 32,000 crore in April 2020, the collections had gradually picked up; since September 2020, the mop-up has been higher than the year-ago levels and for the last five months, the revenues have been above the Rs 1-lakh-crore mark.

The collections had touched the peak of Rs 1,19,875 crore in January (December transactions). Apart from the economic recovery, a stepped-up drive against large-scale tax evasion and a crackdown on fake-invoice rackets with the aid of data analytics also contributed to the acceleration.

“During the month (February), revenues from import of goods was 15% higher and the revenues from domestic transaction (including import of services) are 5% higher than the revenues from these sources during the same month last year,” the government said in a statement.

Meanwhile, various economic indicators show somewhat sustained tempo in January-February. Manufacturing PMI hit a three-month high of 57.7 in January; it eased a tad in February to 57.5, but was still way above the long-term average of 53.6.

Merchandise exports rose 6.2% in January from a year before, the highest in 22 months and compared with a 0.1% rise in December. However, the output of eight infrastructures, with a near 40% share in the index of industrial production, remains subdued. In fact, after a 0.6% rise in September, it slid at a faster pace of 0.9% in October and 2.6% in November before inching up marginally by 0.2% in December and 0.1% in January.

“The GST revenues crossed Rs 1 lakh crore fifth time in a row and crossed Rs 1.1 lakh crore the third time in a row after the pandemic despite this being revenue collection of the month of February. This is a clear indication of the economic recovery and the impact of various measures taken by tax administration to improve compliance,” the government said.

Reacting to the Q3 GDP data released last week, which showed the economy registered flat growth of 0.4% in the quarter after two consecutive quarters of deep contraction caused by the pandemic, the finance ministry said the growth reflected “further strengthening of V-shaped recovery” that began in Q2. The resurgence of the gross fixed capital formation was also triggered by strong capex by the Centre. The fiscal multipliers associated with capex are at least 3-4 times larger than government final consumption expenditure, it said.