GST collection in August at Rs 1.12 lakh crore, marginally lower than July
Despite the dip in collection, the finance ministry said it indicated that the economy was recovering from the impacts of the pandemic.
The Goods and Services Tax collection for the month of August fell to Rs 1,12,020 crore from Rs 1.16 lakh crore in July, data released by the finance ministry showed on Wednesday.
Of the total collection in August, Rs 20,522 crore came from Central GST, while Rs 26,605 crore came from the State GST component. Integrated GST collections amounted to Rs 56,247 crore (including Rs 26,884 crore collected on import of goods) and the Cess was Rs 8,646 crore.
Despite the dip in collection, the finance ministry said it indicated that the economy was recovering from the impacts of the coronavirus pandemic. “The revenues for the month of August 2021 are 30% higher than the GST revenues in the same month last year,” it pointed out. “Even as compared to the August revenues in 2019-’20 of Rs 98,202 crore, this is a growth of 14%.”
GST collections had slipped below the Rs 1 lakh crore mark for the first time in eight months in June.
“With the easing out of Covid restrictions, GST collection for July and August 2021 have again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace,” the ministry said.
The finance ministry maintained that the “robust GST revenues” will continue in the coming months too. “Coupled with economic growth, anti-evasion activities, especially action against fake billers, have also been contributing to the enhanced GST collections,” it added.
On Tuesday, government data showed that India’s Gross Domestic Product grew by 20.1% in the first quarter of the financial year 2020-’21. However, experts pointed out that the seemingly high number was built on a low base after an unprecedented contraction of 24.4% in the first quarter of the previous financial year.
On the GST collections, Rajat Bose, partner at Shardul Amarchand Mangaldas & Co, said there were some obvious signs of economic recovery. “What is heartening to see is that manufacturing states such as Maharashtra, Karnataka and Tamil Nadu have shown an increase of over 30% as compared to last year, which is a sure shot sign of economic recovery,” he told The Indian Express.
However, some economists voiced their concerns about the dip in GST collection.
Aditi Nayar, the chief economist at ICRA, said the August collections “has belied the healthy improvement” in the GST e-way bills, reported The Hindu. E-way bills are mandatory for inter-state transportation of goods valued over Rs 50,000.
“The dip in GST collections, lower-than-expected core sector growth, and moderation in the August manufacturing PMI [Purchasing Managers Index] suggest that some caution is warranted regarding the strength of the recovery that is underway in the ongoing quarter,” Nayar added. PMI is a measure of the prevailing direction of economic trends in manufacturing.