Centre, states collect record ₹1.68 trillion in GST in April

Central and state governments collected a record ₹1.68 trillion in goods and services tax in April, aided by a spurt in economic activity in March and steps taken to improve tax compliance.

The improvement in GST revenue collection is good news for policymakers as it eases the pressure on revenue mobilization through non-tax measures such as divestment and proves to be a relief to state governments, which are likely to lose GST compensation from July.

This trend is also likely to be a key input for the central and state governments while considering further rationalization in the GST slabs and rates for revenue augmentation.

The gross goods and services tax collection in April at ₹1.68 trillion is about ₹26,000 crore more than the previous best of ₹1.42 trillion reported in March, the finance ministry said. It is also 20% more than the GST collected a year ago.

After settlements, the Centre received ₹66,582 crore while states received ₹68,755 crore in April, the statement said.

Finance minister Nirmala Sitharaman said the economy was on a sustained growth path. “Sincerely recognize and appreciate the efforts made by each and every state in improving GST revenue collection. India’s economic recovery is sure to be on a sustained path due to all our efforts,” the minister said in a social media post.

Mint first reported on 6 April that GST revenue in April could surpass the all-time high of March after electronic permits for goods shipments within and across states shot up to 78.1 million that month, the highest since November 2020 for which data was readily available.

In April, revenue from import of goods was 30% higher than a year ago and that from domestic transactions (including import of services) 17% higher over the same period.

“For the first time, gross GST collection has crossed the ₹1.5 trillion mark,” the ministry said, adding that the e-way bill generation growth reflects a fast recovery of business activity.

Tax return filing has improved to 10 million GST returns in Form GSTR-3B (summary of monthly transactions) in April as compared with 9.2 million a year ago. Also, in April, 10.5 million statements of invoices were filed in form GSTR-1 (about sales)—another indicator of improving compliance.

At the end of April, filings by GSTR-3B were 84.7% of the total eligible for that form against 78.3% a year ago. “This shows clear improvement in compliance,” the ministry said, attributing it to steps aimed at encouraging timely returns, making compliance easier, and strict enforcement action was taken against errant taxpayers identified by data analytics and artificial intelligence.

According to experts, a spurt in sales in the last month of the fiscal is not unusual, as businesses rush to fulfil annual sales commitments. This spurt in March sales led to improved collections in April.

“The record GST collection is against the backdrop of the commendable usage of tech in compliances. Also, the usage of analytics has helped,” said Mahesh Jaising, partner at Deloitte India, adding that the figure indicates stabilization in GST collection and economic growth.