NEW DELHI :
Goods and Services Tax (GST) collection reversed a two-month contraction to cross the ₹1 trillion mark in November, in a partial relief for policymakers fighting to boost consumption and liquidity in a slowing economy.
Festival demand and anti-evasion measures such as restricting the use of tax credits where the seller has not uploaded the invoice has contributed to improved tax collections, experts said.
“With implementation of anti-evasion measures like investigation on identified discrepancies through analytics and the recently implemented restriction on availment of unmatched credits, there was a general expectation of collections witnessing an increase. Festive season and related spur in demand as well could be one key reason for the said growth," said According to Abhishek Jain, tax partner, EY.
Central and state governments together collected ₹1.03 trillion in November, 6% more than what was collected in the same month a year ago. This is also the third highest monthly GST receipts so far in the GST era since the indirect tax was implemented in July 2017/, said an official statement.
Till end-November, about 7.8 million summary tax returns were filed, said the statement.
“After two months of negative growth, GST revenues witnessed an impressive recovery with a positive growth of 6% in November 2019 over the November 2018 collections. During the month, the GST collection on domestic transactions witnessed a growth of 12%, the highest during the year. The GST collection on imports continued to see negative growth of 13%, but was an improvement over last month’s negative growth of 20%," said the statement.
Declining GST receipts in the previous two months had led to some tension in Centre-state relations as some states publicly aired their grievances about a delay in GST compensation from the central government.
“Crossing ₹1 trillion in a festive month after a few months of tepid collections would act as sentiment-booster and help in keeping the fiscal deficit under control —hoping that this trend continues in the coming months," said M.S. Mani, partner, Deloitte India