India clocked its second-highest gross Goods and Service Tax collections in January at ₹1,38,394 crore, 15% higher than a year earlier and 25% more than the GST revenues in the pre-COVID month of January 2020.
The numbers are likely to be revised upwards as they only factored in returns filed till 3 p.m. on Monday. The highest monthly GST collection since the introduction of the tax in July 2017, was ₹1,39,708 crore recorded in April last year.
“Revenues from import of goods were 26% higher and the revenues from domestic transaction (including import of services) are 12% higher than the revenues from these sources during the same month last year,” the Finance Ministry said in a statement.
This was the fourth month that GST revenues have crossed ₹1.3 lakh crore and the Ministry said it expected ‘the positive trend’ to continue in the coming months as well.
Apart from settling ₹29,726 crore to Central GST and ₹24,180 crore to States’ GST kitty from the Integrated GST (IGST) collections, the Centre also settled ₹35,000 crore of IGST on an ad-hoc basis in the ratio of 50:50 between the Centre and States and Union Territories in January. GST compensation amounting to ₹18,000 crore was also released to the States in the month.
“The ad-hoc release of IGST between the Centre and the States and the release of GST compensation to States should boost their cash flows, helping them to speed up expenditure in this quarter,” Aditi Nayar, chief economist at ICRA, told The Hindu, noting that the healthy revenues were in line with the increase in e-way bills generated in December vis-a-vis November.
“The GST revenues in December are driven by improved compliances, proactive recoveries, the growth of the economy to pre-pandemic levels and taxpayers opting for an amnesty scheme,” said Abhishek A. Rastogi, partner at Khaitan & Co.“The related factors which need to be seen are the pending refunds for the exporters and any coercive recoveries which may have to be refunded in future,” he added.