Signalling accelerating economic activity, GST collection topped the Rs 1-lakh-crore mark for the second straight month in August at Rs 1.12 lakh crore.
The tax collections in August on goods sold and services rendered was 30 per cent higher than Rs 86,449 crore collected in August 2020, and 14 per cent higher than Rs 98,202 crore collected in August 2019.
Sequentially, however, there was a 3.76 per cent dip in August 2021 collection vis-a-vis Rs 1.16 lakh crore mopped up in July 2021.
“The gross GST revenue collected in the month of August 2021 is Rs 1,12,020 crore of which Central GST is Rs 20,522 crore, State GST is Rs 26,605 crore, Integrated GST is Rs 56,247 crore (including Rs 26,884 crore collected on import of goods) and Cess is Rs 8,646 crore (including Rs 646 crore collected on import of goods),” the finance ministry said in a statement.
During August this year, the revenues from domestic transactions (including import of services) were 27 per cent higher than the revenues from these sources during the same month last year.
The GST collection, after posting above the Rs 1-lakh-crore mark for nine months in a row, dropped below Rs 1 lakh crore in June 2021, after the second wave of COVID caused a blip.
“With the easing out of COVID restrictions, GST collection for July and August 2021 have again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, especially action against fake billers have also been contributing to the enhanced GST collections. The robust GST revenues are likely to continue in the coming months too,” the finance ministry said.
ICRA Chief Economist Aditi Nayar, however, cautioned over the sequential dip in collection and moderation in the August manufacturing PMI. The PMI index stood at 52.3 per cent in August, down from 55.3 per cent in July.
“The sequential dip in the GST collections, lower-than-expected core sector growth, and moderation in the August manufacturing PMI suggest that some caution is warranted regarding the strength of the recovery that is underway in the ongoing quarter.
“We expect GDP growth in the ongoing (September) quarter to range between 7.8-8.8 per cent, with the absolute level of GDP to continue to trail the pre-pandemic level as the services sector struggles to catch up with the rest of the economy,” Nayar said.
India’s economy grew by a record 20.1 per cent in April-June quarter, helped by a weak base of last year and sharp rebound in manufacturing and services sector.
Singhania GST Consultancy & Co Partner Aditya Singhania said the collection during August 2021, majorly relates to supplies that took place in July 2021, and it seems to maintain the revenue consistency in comparison to the collection of July 2021, which clearly indicates the economy is thriving with the steady pace.
“With the new milestones India is achieving in getting people vaccinated, easing out of COVID restrictions, extension of amnesty scheme for waiver in late fees due to non-filing of GSTR 3B from July, 2017 to April, 2021, September being the last month to rectify the errors/omission for FY 2020-21, upcoming due dates for filing of annual return/self-certified reconciliation statement for FY 2020-21, sequential spurt in e-waybill generation, etc. we may see acceleration in revenue from GST in coming months,” he said.
In the current fiscal, GST mop up touched a record high of over Rs 1.41 lakh crore in April, but fell to over Rs 1.02 lakh crore in May after the outbreak of second wave. In June, collection slipped below the psychological Rs 1 trillion mark to Rs 92,849 crore followed by a sharp rebound in July to Rs 1.16 lakh crore. In August it stood at Rs 1.12 lakh crore.
EY Tax Partner Abhishek Jain said the collections are for the supplies made in the month of July, when lockdown restrictions were relaxed for most parts of the country. “With increasing rate of vaccination and business supplies picking up, the uptrend is expected to continue in coming months,” Jain added.
Shardul Amarchand Mangaldas & Co Partner Rajat Bose said what is heartening to see is that manufacturing states such as Maharashtra, Karnataka and Tamil Nadu have shown an increase of over 30 per cent in GST collection, as compared to last year, which is a sure-shot sign of economic recovery.
Deloitte India Senior Director M S Mani said “most of the key manufacturing states have shown an increase of 25-35 per cent in collections compared to the same period last year, indicating that the economic recovery may be faster in the current year.”