Backed by festival sales, the Goods and Services Tax (GST) collections for the business activities undertaken in the month of October, recorded in the month of November continued to remain above Rs 1 lakh crore mark.
Coming in at Rs 1,04963 crore, the GST collections continue to be in growth trajectory for third consecutive month. Though the collections come in marginally lower, when compared on a month on month basis, but on a year on year comparison, the collections are about a thousand crore rupees higher.
"In line with the recent trend of recovery in the GST revenues, the revenues for the month of November 2020 are 1.4 percent higher than the GST revenues in the same month last year. During the month, revenues from import of goods was 4.9 percent higher and the revenues from domestic transaction (including import of services) are 0.5 percent higher that the revenues from these sources during the same month last year," finance ministry in a statement said.
Looking at the break up, "The gross GST revenue collected in the month of November, 2020 is Rs 1,04,963 crore of which CGST is Rs 19,189 crore, SGST is Rs 25,540 crore, IGST is Rs 51,992 crore (including Rs 22,078 crore collected on import of goods) and cess is Rs 8,242crore (including Rs 809 crore collected on import of goods)," finance ministry statement said.
The total number of GSTR-3B returns filed for the month of November up to November 30, 2020 is 82 lakh. Experts see this as a positive trend, but continue to keep a cautious view on the collections that are slated in the coming months.
Abhishek Jain, tax partner, EY said, "Second straight month of 1 lakh plus collection is certainly indicative of continued economic recovery and the collections being slightly more than same month last year is quite encouraging. This should also help in containing the shortfall of GST collections caused due to the pandemic."
Rajat Mohan, senior partner, AMRG & Associates, said, "The majority of the Indian states and union territories have shown a growing trend in the month of November, only a few states like Chandigarh, Delhi, Bihar, Goa and Other territory which includes ships, rigs etc. have shown a decline of exceeding 10 percent when compared with the same period of year 2019. States like Sikkim, Arunachal Pradesh, Nagaland, Tripura, Jharkhand, Tamil Nadu, Gujarat, Andhra Pradesh and Centre Jurisdiction which includes Online Information Database Access and Retrieval services (OIDAR services) like Amazon Prime, Netflix etc. has outperformed last year's tax collections by more than 10 percent. Tax collections for OIDAR services like Amazon Prime, Netflix etc. has been performing magnificently since the instigation of pandemic in month of March, 2020."
"While the increase in the overall collections does signify an economic recovery, the fact that the collections are lower in some key states ( Maharashtra, UP, Karnataka, Telangana) while higher in others( Gujarat, Andhra Pradesh, Tamil Naidu ) compared with the same period last year, signifies that the revival in economic activities is not uniform across states," MS Mani, senior director, Deloitte India.
"GST collections have been on a higher trajectory compared with the last year during the past three months. If this trend continues in the coming months, it would help alleviate concerns on the fiscal deficit. With the onset of e-invoicing for the next tranche of taxpayers from January, it is expected that the uptick in collections would continue," Mani added.
ICRA principal economist Aditi Nayar said while the mild month-on-month dip in the headline GST collections in November 2020 relative to the previous month is discouraging, the sharp decline in their YoY (year-on-year) growth in between these two months can be attributed to the base effect, related to the shift in the festive dates.
"On a positive note, the average pace of growth in GST collections in October-November 2020 stood at a moderately healthy 6 percent. The trends regarding the sustainability of demand will be clearer in the data on the GST collections for December 2020, which will be for the transactions that took place in the month of November 2020," Nayar said.
Nayar also said the sharp moderation in growth in the generation of GST e-way bills in November relative to the previous month signals the impact of the change in working days related to the shift in the festive calendar.
PwC India leader indirect tax Pratik Jain said the trend continues to reinforce the belief that economy is recovering fast, "Now that the festival season is over, one would have to see if December collection is also buoyant. The other encouraging aspect is a gradual increase in number of GST returns that are now getting filed which indicates that overall compliance level is improving with increased use of technology and initiatives such as e-invoicing by the government."
Shardul Amarchand Mangaldas & Co partner Rajat Bose said it is likely that the collections will be around this level for the remainder of the financial year, "Robust tax collections mitigate the risk of fiscal slippage especially at a time when the economy is going through one of its worst phases, which should be a sigh of relief for the government."
(Edited by : Jomy)