Gross Goods and Services Tax (GST) revenues fell to 1.12 lakh crore in August from 1.16 lakh crore in July, says FM Nirmala Sitharaman, stipulating a “fast” economic recovery.
A 3.75 percent dip compared to last month's GST revenue. However, GST receipts in August were 30% higher than the same month a year ago, despite the pandemic's second wave, a positive sign.
A 14% increase from ₹ 98,202 crores (august 2019-20) to ₹86,449 crores (august 2020-21), implying that GST collection has surpassed pre-pandemic levels -says FM Nirmala Sitharaman.
Bifurcation of August's revenues, with Central GST accounting for ₹20,522 crores, State GST for ₹26,605 crores, and integrated GST for ₹56,247 crores.
Compared to the same month last year, revenues from domestic transactions (including the import of services) increased by 27 percent. This was a 14 percent increase over August 2019 levels, the government release said.
After a phenomenal streak of ₹1 lakh crore for nine months, GST collection fell below Rs 1 lakh crore in June 2021 owing to the second wave of COVID.
Moreover, in the month of December 2020, GST revenues hit a record high of 1,15,175 crore, the highest since the induction of GST in 2017.
The Finance Ministry claims that anti-evasion activities, particularly action against fake billers, have also contributed to increased GST collections when combined with economic growth. GST revenues are anticipated to fuel the growth in the coming months as well.
Economists, on the other hand, are skeptical.
ICRA chief economist Aditi Nayar said the sequential dip in GST revenues 'belied the healthy improvement in the e-way bills to a daily average of 2.1 million in July 2021 from 1.8 million in June 2021, which was reflective of the lifting of restrictions especially across the Southern States’
Nayar added, “The sequential dip in the GST collections, lower-than-expected core sector growth, and moderation in the August manufacturing PMI suggest that some caution is warranted regarding the strength of the recovery that is underway in the ongoing quarter”
The collections, according to EY India tax partner Abhishek Jain, are for supplies made in July, when lockdown restrictions were lifted in most parts of the country. “With the rising rate of vaccination and the increasing demand for business supplies, the upward trend is expected to continue in the coming months,” he said