New Delhi: Goods and Services Tax (GST) collection in March rose 15.6% from a year ago to hit ₹1.06 trillion, the highest since the new indirect tax system took effect on 1 July 2017.
“Total gross GST revenue collected in March 2019 is ₹1,06,577 crore, of which CGST (central GST) is ₹20,353 crore, SGST (state GST) is ₹27,520 crore, IGST (integrated GST) is ₹50,418 crore (including ₹23,521 crore collected on imports) and cess is ₹8,286 crore (including ₹891 crore collected on imports)," the finance ministry said on Monday. Average monthly GST revenue during August-March 2017-18 was ₹89,885 crore. This rose to ₹98,114 crore during April-March 2018-19. The finance ministry said revenue growth has picked up in the last few months, despite various rate cuts by the GST Council. GST mop-up for the whole of 2018-19 stands at ₹11.77 trillion.
Finance minister Arun Jaitley tweeted that the March figures indicate an expansion in manufacturing and consumption.
As many as 7.595 million GSTR 3Bs (summary returns) were filed till 31 March for February, against 7.348 million a month ago.
“The steep increase in GST collections is quite a welcome outcome for the economy. Some major reasons for the growth could be reconciliations by businesses of outward and inward supplies, intelligent data analytics, related tax leakage detections and consequent GST payment by businesses," said Abhishek Jain, tax partner, EY India.
The higher GST collection will reduce pressure on the centre emanating from compensation paid to the states for any revenue loss, said Devendra Kumar Pant, chief economist at India Ratings.
“Any surplus in the compensation cess account would be a bonus both for central and state governments," he said.
Monthly GST collection has largely remained below the average expected ₹1 trillion, barring April, October, January, and March, largely because of several rate cuts and procedural hurdles.
In the interim budget, the government slashed the CGST revenue target by ₹1 trillion to ₹6.43 trillion, excluding states’ share of revenue. The government aims to collect ₹7.61 trillion in 2019-20, including CGST, IGST, and compensation cess.
“It is worth noting that the projected growth in GST collections for 2019-20 is around 20% over 2018-19. Achieving this steep target would call for substantial increase in the tax base by plugging the existing leakages, as room for increase in tax rate seems limited," said Pratik Jain, partner and leader indirect tax, PwC India.