At Rs 1.05 lakh crore in October, GST receipts up 10%

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November 2, 2020 5:00 AM

The y-o-y growth in GST revenue in July, August and September were -14%, -8% and 5% respectively, the ministry noted, adding that this “clearly showed the trajectory of recovery of the economy and, correspondingly, of the revenues”.

GST collections in any month are largely in relation to the transactions in the economy in the previous month.GST collections in any month are largely in relation to the transactions in the economy in the previous month.

The gross goods and services tax (GST) revenue for October came in at Rs 1,05,155 crore, the highest level since February and up a solid 10% over the mop-up in the year-ago month.

The increase in the collections underscored a pick-up in the speed of demand revival in September, which many other lead indicators, too, have shown signals of.

GST collections in any month are largely in relation to the transactions in the economy in the previous month.

Bloomberg News reported recently that five of the eight high-frequency indicators, including exports, tracked by it improved in September, while three were steady; both domestic and overseas demand helped the recovery in September, it added.

Last week, official data showed that eight core industry sectors shrank just 0.8% on year in September, which was their lowest contraction since March 2020; electricity and steel output showed positive growth for the first time since March, while coal production also showed growth, although aided by a very favourable base.

However, economists are cautious about the durability of the uptrend, as they attributed the September recovery to pent-up demand after the lockdown was eased. Aditi Nayar, principal economist at Icra, wrote: “…we caution that the sustainability of the upturn may not be universal, and await signs of its durability”.

According to a statement issued by the finance ministry, “During (October), revenues from import of goods was 9% higher and the revenues from domestic transaction (including import of services) were 11% higher than the revenues from these sources during the same month last year.”

The y-o-y growth in GST revenue in July, August and September were -14%, -8% and 5% respectively, the ministry noted, adding that this “clearly showed the trajectory of recovery of the economy and, correspondingly, of the revenues”.

GST collections in September stood at Rs 95,480 crore, as, for the first time, the collections in any month of this fiscal exceeded the year-ago levels. Of course, a late fee/penalty waiver deadline helped the September GST mop-up.

The total revenues earned by Central government and the state governments after regular settlement in October were Rs 44,285 crore for CGST and Rs 44,839 crore for the SGST. The compensation cess proceeds were Rs 8,011 crore (including Rs 932 crore collected on import of goods). The total number of GSTR-3B returns filed for October up to the last date of the month was 80 lakh.

Abhishek Jain, tax partner at EY, said: “This uptick in collections on month on month basis and over same month last year is quite a welcome one for the government and the economy in particular. Some potential reasons for this surge could be the splurged demand on account of the festivities and input tax credit/other similar reconciliations which were due for businesses in September.”

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