February GST mop-up at Rs 1.49 trillion

The goods and services tax (GST) collection stood at Rs 1.49 trillion in February, about 5% lower than the Rs 1.56 trillion collected in the preceding month. However, the collections are in line with the average monthly collection of Rs 1.5 trillion, indicating stabilisation in the indirect tax levy as well as normalisation of economic activities, and were aided partly by higher inflation.

According to data released by the finance ministry on Wednesday, of the gross GST revenue collected in February, while the central GST was Rs 27,662 crore, state GST was Rs 34,915 crore, integrated GST Rs 75,069 crore (including Rs 35,689 crore collected on import of goods), and cess Rs 11,931 crore (including Rs 792 crore collected on import of goods).

“This month witnessed the highest cess collection since the implementation of GST. Normally, February being a 28-day month, witnesses a relatively lower collection of revenue,” the finance ministry said in a statement. The mop-up in February this year was 12.4% higher than the `1.33 trillion collected in February 2022. The month, in fact, registered the fourth-highest GST collections in the current financial year.

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The government has settled `34,770 crore to Central GST and `29,054 crore to state GST from integrated GST as regular settlement. The total revenue of the Centre and states after regular settlements in February 2023 was `62,432 crore for CGST and `63,969 crore for the SGST. The Centre has also released the balance GST compensation of `16,982 crore for June 2022 and `16,524 crore as arrears to six states and UTs based on figures certified by their respective accountant generals. Revenue from import of goods was 6% higher and the revenue from domestic transaction (including import of services) was 15% higher compared with a year ago.

February’s mop-up also indicates that the Centre is on track to meet its targeted revenue from the levy this fiscal. With a recovery in economic activities and higher than expected nominal growth, the government has hiked the GST target for the current fiscal to `8.54 trillion in the revised estimate from `7.8 trillion, which was initially budgeted.

Aditi Nayar, chief economist, head – research & outreach, Icra, said the sequential dip in the GST collections in February was partly on account of the boost to the January figure from the quarter-ending inflows (for the month of December, which were remitted in the following month). “We expect the FY23RE for CGST collections to be met. However, there could be some shortfall in direct taxes relative to the FY23 revised estimate,” Nayar said.

Saurabh Agarwal, tax partner, EY, noted that the monthly revenue marks over `1.4-trillion collection for straight 12 months in a row. “February 2023 being a month of 28 days, the collection is much in line with the new normal of GST revenue of `1.5 trillion. This is a likely indicator that Indian economy remains much stable compared with global cues,” he said.

Among states, the GST collection revealed a mixed trend with a number of them reporting receipts less than the 12% growth on an all-India basis. These included Chhattisgarh and Gujarat, which saw an 8% growth in GST collections each in February 2023, Odisha (10%), and Chandigarh and Himachal Pradesh (5% each). Meghalaya was the only state that reported a 6% contraction in GST revenues in February 2023 compared with a year ago. Among major states, Andhra Pradesh reported a 39% increase in GST collections on an annual basis, Goa (35%), Jammu and Kashmir (33%), Bihar (24%), Haryana (23%), Tamil Nadu (19%), Karnataka (18%), Jharkhand (17%) and Maharashtra (15%).