NEW DELHI: GST collections posted growth for the third month in a row in November over the previous year collections, in signs that the economy continues to reflate after a strict lockdown.
Collections of tax on the sale of goods and rendering of services came in at Rs 1,04,963 crore in November, the finance ministry said in a statement on Tuesday.
The collections were higher than Rs 1.03 lakh crore recorded in November 2019 but were Rs 192 crore lower than October 2020 collections.
The Goods and Services Tax (GST) collections, which directly reflects the state of economic activity, had plummeted to a record low of Rs 32,172 crore in April after the government imposed a nationwide lockdown to curb the spread of coronavirus.
Subsequent easing of lockdown restrictions helped collections rise. The collections witnessed the first year-on-year growth in September and last month, it crossed the psychological Rs 1 lakh crore-mark.
November is the second straight month when GST revenues have topped Rs 1 lakh crore. One lakh crore is one trillion. The year-on-year growth in GST collections in November stood at 1.4 per cent while in October and September, it was at 10 per cent and 4 per cent, respectively.
"In line with the recent trend of recovery in the GST revenues, the revenues for the month of November 2020 are 1.4 per cent higher than the GST revenues in the same month last year.
During the month, revenues from import of goods was 4.9 per cent higher and the revenues from domestic transaction (including import of services) are 0.5 per cent higher than the revenues from these sources during the same month last year," the ministry said in the statement.
The gross GST revenues collected in the month of November 2020 were Rs 1,04,963 crore, out of which central GST was Rs 19,189 crore and state GST was Rs 25,540 crore.
IGST was Rs 51,992 crore, including Rs 22,078 crore collected on import of goods, and cess was Rs 8,242 crore, including Rs 809 crore collected on import of goods, the statement said.
Last week, sources in the finance ministry said that GST officers have identified top 25,000 taxpayers who had filed GST returns in October but have not done so for November.
Till November 28, 80 lakh GST returns were filed for that month.
As per GST rules, for the supplies made in the month of October, the GSTR-3B returns were expected to be filed in a staggered manner by 20th, 22nd and 24th of November.
Those having a turnover above Rs 5 crore annually are expected to file their GSTR-3B by 20th of the month. GST revenues had topped Rs 1 lakh crore in 8 out of the 12 months of 2019-20 fiscal.
However, in the current fiscal, the revenues have taken a hit due to COVID-19 lockdown and consequent slowdown in economy.
Revenues in April was Rs 32,172 crore, May (Rs 62,151 crore), June (Rs 90,917 crore), July (Rs 87,422 crore), August (Rs 86,449 crore), September (Rs 95,480 crore), October (Rs 1,05,155 crore) and November (Rs 1,04963 crore).
Commenting on the numbers, ICRA Principal Economist Aditi Nayar said that while the mild month-on-month dip in the headline GST collections in November 2020 relative to the previous month is discouraging, the sharp decline in their Y-o-Y (Year-on-Year) growth in between these two months can be attributed to the base effect, related to the shift in the festive dates.
"On a positive note, the average pace of growth in GST collections in October-November 2020 stood at a moderately healthy 6 per cent.
The trends regarding the sustainability of demand will be clearer in the data on the GST collections for December 2020, which will be for the transactions that took place in the month of November 2020," Nayar said.
EY Tax Partner Abhishek Jain said the second straight month of Rs 1 lakh crore plus collection is certainly indicative of continued economic recovery and the collections being slightly more than same month last year is quite encouraging.
"This should also help in containing the shortfall of GST collections caused due to the pandemic." Nayar also said the sharp moderation in growth in the generation of GST e-way bills in November relative to the previous month signals the impact of the change in working days related to the shift in the festive calendar.
"The average growth of GST e-way bills in October-November 2020 surpassed that for the month of September 2020, which is encouraging," Jain added.
Deloitte India Senior Director M S Mani said the trend of improved collections three months in a row points to stability returning in economic activities across the country and it is expected that this trend is sustainable in the coming months.
"However, there is a decline in collections in key states such as Maharashtra, UP, Delhi, Karnataka, Telengana which could indicate that the revival in economic activities has not been uniform across the country as Gujarat, AP, Tamil Nadu, West Bengal, Odisha have recorded increase in collections during the same period," Mani added.
PwC India Leader Indirect Tax Pratik Jain said the trend continues to reinforce the belief that economy is recovering fast.
"Now that the festival season is over, one would have to see if December collection is also buoyant.
The other encouraging aspect is a gradual increase in number of GST returns that are now getting filed which indicates that overall compliance level is improving with increased use of technology and initiatives such as e-invoicing by the government," Jain said.
Shardul Amarchand Mangaldas & Co Partner Rajat Bose said it is likely that the collections will be around this level for the remainder of the financial year.
"Robust tax collections mitigate the risk of fiscal slippage especially at a time when the economy is going through one of its worst phases, which should be a sigh of relief for the government," he added.