In what could be a healthy sign of economic recovery, goods and services tax (GST) collections recorded in the month of October are likely to cross Rs 1 lakh crore for the first time this fiscal. According to government sources, GST collection for business activity in September, for which returns are recorded in October, look "extremely healthy".
"For the second straight month in October, GST collections are likely to record a growth trend. Going by the current numbers of monthly returns, GST collections recorded in October are likely to cross the Rs 1 lakh-crore mark," the source said.
The source added that some of the prime reasons for the rise in GST collection include a sharp recovery seen in the number of GSTR3B returns, which are the monthly returns filed so far. "Over 75 lakh GSTR3B returns have already been filed to date. These are about 10-15 lakh more in number of returns filed if compared to returns filed during the same period last month," the source said.
"There is a huge impact on the business activity as well, post the unlock guidelines, the economy is now slowly and steadily normalising, aiding filing of more GST returns. Moreover, during September, a lot of initial buying was done by wholesalers to meet festive demand, which too is pushing growth," the source explained.
GST collection recorded in October 2019 was Rs 95,380 crore.
Gross GST revenue collected in September 2020 is Rs 95,480 crore, of which CGST is Rs 17,741 crore, SGST is Rs 23,131 crore, IGST is Rs 47,484 crore (including Rs 22,442 crore collected on import of goods) and cess is Rs 7,124 crore (including Rs 788 crore collected on import of goods). This was 4% higher than the GST revenues in the year ago period. During September, the revenue from import of goods was 102 percent and revenue from domestic transaction (including import of services) was 105 percent compared to the same month last year.
Pratik Jain, Partner and Leader, Indirect Tax at PwC India said, "Given the surge in number of returns filed and the fact that there is a clear uptick in demand due to revival of economy as well as upcoming festive season, one would not be surprised if the collections in October cross 1 lakh crore.
"Typically, sales in the last month of a quarter is a tad higher than the previous two months. One of the reason for higher number of returns could be the fact that last date for claiming input credit for 2019-20 was September 30, and many companies would have carried out an yearly reconciliation and nudged vendors to file returns or report missing transactions."
MS Mani, Senior Director at Deloitte India said, "A rebound in GST collections would indicate that economic recovery is underway and that businesses are gradually approaching normalcy."
Abhishek Jain, Tax Partner at EY said: "With most sectors having resumed operations and the upcoming festive season in the country, there is a general anticipation of a surge in GST collections this month. Additionally, the implementation of anti-evasion measures like e-invoicing (already as well as in the pipeline), collections are expected to steadily rise in the coming months."
First Published: IST