December GST receipts at all-time high2 min read . Updated: 02 Jan 2021, 12:01 AM IST
The previous highest collection was ₹1.14 trillion in April 2019, but the revenue receipts of April normally tend to be high as it pertains to the returns of March, which marks the end of the financial year
NEW DELHI : The goods and services tax (GST) revenue receipt of central and state governments rose to a record ₹1.15 trillion in December as economic activity extended its momentum and a sustained drive against tax evasion yielded results. GST revenue has crossed ₹1.1 trillion only three times since the indirect tax regime was implemented in April 2017.
The previous highest collection was ₹1.14 trillion in April 2019, but the revenue receipts of April normally tend to be high as it pertains to the returns of March, which marks the end of the financial year.
A statement from the finance ministry said the collections in December were 12% more than a year ago and also sharply higher than the ₹1.05 trillion collected in November.
The ministry said that the December tax receipts, which is for transactions done in November, yielded ₹21,365 crore in central GST, ₹27,804 crore in state GST, ₹57,426 crore in integrated GST on inter-state supplies and ₹8,579 crore from GST cess.
“This has been due to the combined effect of the rapid economic recovery post-pandemic and the nationwide drive against GST evaders and fake bills along with many systemic changes introduced recently, which improved compliance," it said.
The government has been gradually reducing tax credits businesses could use to set off their final tax liability in cases where their suppliers have not filed returns. It has also brought in more compliance-boosting measures.
From 1 October, the process of online validation of business-to-business transactions was made compulsory for companies with sales of ₹500 crore or more. The revenue cut-off has been lowered to ₹100 crore from 1 January. Also, officials have been stepping up enforcement efforts. In a nationwide drive against fake invoicing in November, GST authorities arrested more than 175 people and registered more than 1,800 cases against 8,000 entities, a government official said earlier this week.
Experts said the compliance improvement drive played a significant role in the revenue collection growth. “GST collections crossing ₹1.15 trillion for the first time despite us not being completely out of the pandemic indicates a remarkable recovery in the economy. Some of it could also be due to the plugging of the GST revenue leakage," said Abhishek Jain, tax partner, EY.
Among major states, Maharashtra reported a 7% increase in tax receipts in December from a year ago, while Tamil Nadu, Karnataka and Uttar Pradesh reported an 8% jump and Gujarat saw a 13% rise.
With major states reporting an increase ranging from 6-15% in their GST collections, compared to the same period last year, it is expected that a part of the shortfall in collections in the initial months of the current fiscal year would be made up by the improving collections in the past three months, said M.S. Mani, senior director, Deloitte India.