The Goods and Services Tax (GST) collection for September in certain crucial states increased significantly, marking a pick up in business activities across those states.
Collections from Sikkim, Arunachal Pradesh, Meghalaya, Jharkhand, Odisha, Chhattisgarh, Gujarat, Maharashtra, Karnataka, Telangana, Andhra Pradesh, and Ladakh recorded an increase of at least 20% in collections.
“The significant increase in GST collections both from import and domestic transactions compared to the same period last year and the marked increase in the collections in key states indicates an acceleration in business activities that are spread across states,” said MS Mani, senior director, Deloitte India.
The finance ministry in a release on October 1 said that GST collection for September continued to remain over the Rs 1-lakh-crore threshold for the third consecutive month at over Rs 1.17 lakh crore.
Collection for September 2021 saw a 23% year-on-year jump. “The gross GST revenue collected in September 2021 is Rs 1,17,010 crore of which CGST (Central GST) is Rs 20,578 crore, SGST (State GST) is Rs 26,767 crore, IGST is Rs 60,911 crore (Integrated GST) (including Rs 29,555 crore collected on import of goods) and cess is Rs 8,754 crore (including Rs 623 crore collected on import of goods),” the release said.
According to experts and analysts, the buoyancy in GST collection is an indicator of economic recovery. “A 23% growth over September 2020 is impressive. As the festive season starts, GST collections should also see a rise soon,” said Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co.
Revenues from import of goods were 30% more and revenues from domestic transactions (including import of services) were 20% higher than the revenues from these sources during the same month last year.
“The GST collection figures indicate that growth of the economy is leading to stable collections, which would help in achieving the fiscal deficit target of 6.8% of GDP,” according to Mani.
The average monthly gross GST collection for the second quarter of the current year has been Rs 1.15 lakh crore, 5% higher than the average monthly collection of Rs 1.10 lakh crore in the first quarter of the year.
“Most of the key manufacturing states reporting a growth of 20% plus compared to last year does indicate that an economic revival is clearly in progress across key states,” Mani said.
Centre had also released Rs 22,000 crore in GST compensation to states to meet their GST revenue gap.
“The release of GST compensation cess of Rs 22,000 crore will benefit the states' cash flow situation, allowing accelerated spending in Q3 FY2022, complementing the expected boost to central government spending after the easing of cash management guidelines,” said Aditi Nayar, chief economist, ICRA Limited.