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

New Delhi: Central and state governments collected ₹1.68 trillion in Goods and Services Tax (GST) revenue in April, aided by a spike in economic activity in the last month of the previous financial year and a series of steps taken to improve tax compliance.

The gross GST collection in April 2022 at ₹1.675 trillion is at all-time high and is ₹25,000 crore more than the next highest collection of ₹1.42 trillion reported in the month before, said a statement from the finance ministry. The latest revenue collection figure is also 20% higher than the GST revenue collected in the same month a year ago.

After settlements, Centre received ₹66,582 crore while states received ₹68,755 crore in April, the statement said. Mint had reported on 6 April that GST revenue collections in April could surpass the all-time high seen in March given that electronic permits for goods shipment within and across states in March had shot up to 78.1 million, the highest since November 2020 for which data was readily available.

In April, revenue from import of goods was 30% higher and the revenues from domestic transactions (including import of services) was 17% higher than the revenues from these sources during the same month a year ago, the statement said.

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

The ministry said that tax return filing has improved year-on-year in April. In April, 10 million GST returns in form GSTR-3B (summary of monthly transactions based on which taxes are paid) were filed, as compared to total 9.2 million returns filed in April 2021. Also, in April 2022, 10.5 million statements of invoices were filed in form GSTR-1 (about sales). This shows an improvement in the return filing compliance.

Till end of April, the filing percentage for GSTR-3B was 84.7% as compared to 78.3% in the same month a year ago. “This shows clear improvement in the compliance behaviour,” the ministry said, attributing it to measures taken to nudge taxpayers to file returns timely, making compliance easier and strict enforcement action taken against errant taxpayers identified based on data analytics and artificial intelligence.

According to experts, normally, in the last month of the financial year, businesses try to conclude annual sales commitments and therefore, a spurt in sales is seen. This spurt in March sales leads to improved collections in April.

“The record GST collection is in the backdrop of the commendable usage of technology in compliances by the government. Also, the usage of analytics has helped. It is interesting to note that the growth is across most of the states,” said Mahesh Jaising, partner at Deloitte India, adding that the figure indicates stabilisation in GST collection and economic growth.

The improvement in GST revenue collection comes as a good news for policy makers as it eases the pressure on revenue mobilisation through non-tax revenue 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 rationalisation in the GST slabs and rates for revenue augmentation.