E-way bills generated by businesses for inter-state commerce in June were up 1.2% on-month and 36.2% on-year, suggesting that July goods and services tax (GST) collections will likely be around Rs 1.5 trillion.
E-way bills stood at 74.48 million in June 2022, the second-highest since the system was rolled out in 2018.
Gross GST collections have averaged Rs 1.51 trillion in the first quarter of FY23, a feat achieved through stricter enforcement of compliance and rebound in economic activities.
Usually, initial months of a financial year were known for yielding lesser revenues than in the months in the second half of the year.
“The GST collections will continue to be robust. The festival season will start soon and it will continue all the way till December. The last quarter in any case is always the highest in terms of revenue collections,” a senior official said.
Senior government officials reckon that the average monthly GST collections will average around `1.5 trillion in FY23 as against the budget estimate of about Rs 1.2 trillion, generating substantial revenue upsides for states at a time when the guaranteed GST compensation for them ended on June 30.
Monthly gross GST collections rose to Rs 1.45 trillion in June despite a moderation in e-way bills in May, reflecting better utilisation of trucking capacity.
Given that an incipient pick-up in consumption has resulted in a more-than-proportionate jump in GST revenues, a stronger economic recovery could allow the collections to settle at an elevated level, proving the high revenue productivity of the broad-based consumption tax. The rise in monthly gross GST collections have given some breathing space to the Centre to recalibrate an action plan on tax rates, as the shortfall in GST by states after end of compensation mechanism will not be that high.