GST collection in October crossed Rs 1 trillion for the first time in eight months, showing the aftereffects of the unlock from September onwards. Collection in any month is for the business done in the earlier month. At Rs 1.05 trillion, the GST collection was not just 10% higher than the Rs 95,379 crore a year prior however practically equivalent to that in February, which was before the lockdown and when the pandemic hadn’t struck.
The finance ministry said growth in GST at 10% and 4 percent in the earlier month indicated the direction of financial recovery and, correspondingly, the revenues. The finance ministry also said that the growth in GST at 10% when compared with a reduction of 14 percent, 8 percent, and 5 percent in July, August, and September, individually, indicated the direction of economic recovery and, correspondingly, the revenues.
“Given the festivities, collection in November could also be robust. We would need to see if this trend held after November as well,” said Pratik Jain, partner at PwC.
8,000,000 input-output summary returns were filed in October. Jain said this was on the grounds that the last date for claiming the input tax credit for 2019-20 was September 30 and a lot of organizations probably completed a yearly reconciliation asked their vendors to file returns or report missing transactions, among other factors. “We remain as yet unconvinced on the persistence of this trend after the festive season is over, after the pent-up demand is fulfilled,” said Aditi Nayar, principal economist, ICRA. M S Mani, Senior Director at Deloitte, said GST Collection demonstrated a distinct revival in consumption and festival spends in the economy.
“The continuance of this trend will help in narrowing the fiscal deficit for 2020-21 and will go a long way in reviving business confidence across sectors as the impact of unlock across states gets translated into GST collection figures,” said Mani.
All components of GST — central GST (CGST), State GST (SGST), integrated GST (IGST), or the remuneration cess — were higher in October than in September. For example, CGST yielded Rs 19,193 crore in October, against Rs 17,741 crore in September, and SGST Rs 25,411 crore in October, against Rs 23,131 crore in the previous month. IGST collection remained at Rs 52,540 crore in October, against Rs 47,484 crore in September. Of this, Rs 23,375 crore was collected through imports of products, against Rs 22,442 crore in September.
Compensation cess collection rose to Rs 8,011 crore, against Rs 7,124 crore. Of this, Rs 932 crore was through imports of products, against Rs 788 crore in September. In October, revenues (IGST) from imports of goods were 9 percent higher and collection from domestic transactions (including import of services) was 11 percent more than those from these sources during the same month a year ago. This likewise shows restoration sought after in the economy. This also indicates a revival in demand in the economy.
The number of states showing a fall in GST collection from domestic transactions diminished to six in October, from 14 in September. Kapil Rana, author, and director of HostBooks said growth in GST collection and returns filed depicted strong economic recovery. The Indian economy contracted 23.9 percent in the primary quarter and different projections have assessed the fall in GDP at more than 9 percent this monetary year.