Increased imports and IT raids improve GST collection in India

The gross GST revenues collected in December 2021 stood at Rs1,29,780 crore, 13 per cent higher than the GST revenues collected in the same month of 2020, and 26 per cent higher than the GST revenues in December 2019.

In December 2021, revenues from imports were 36 per cent higher, and the revenues from domestic transactions (including import of services) were 5 per cent higher than the revenues from these sources collected during the same month of 2020.

The average monthly gross GST collection for the third quarter of the current financial year has been Rs 1.30 lakh crore against the average monthly collection of Rs 1.10 lakh crore and Rs1.15 lakh crore in the first and second quarter, respectively.

The GST collection for December 2021 was close to Rs1.30 lakh crore despite reduction of 17 per cent in the number of e-way bills generated in the month of November 2021 (6.1 crore) as compared to the month of October, 2021 (7.4 crore) due to improved tax compliance and better tax administration by both Central and state tax authorities.

Coupled with economic recovery, anti-evasion activities, especially action against fake billers, have been contributing to the enhanced GST. The improvement in revenues has also been due to various rate rationalisation measures undertaken by the GST Council to correct the inverted duty structure. It is expected that the positive trend in revenues will continue in the last quarter as well, informed the Ministry of Finance.

The gross GST revenues collected in the month of December 2021 stood at Rs1,29,780 crore, of which CGST is Rs22,578 crore, SGST Rs28,658 crore, IGST Rs69,155 crore (including Rs37,527 crore collected on import of goods) and cess Rs 9,389 crore (including Rs 614 crore collected on import of goods).

The government has settled Rs25,568 crore to CGST and Rs21,102 crore to SGST from IGST as regular settlement. The total revenues of Centre and the states in December 2021 after settlements stood at Rs48,146 crore for and Rs49,760 crore, respectively.

India’s GST collection rose 13 per cent in December 2021 on a year-on-year basis to Rs1,29,780 crore.

However, December’s collections declined on a sequential basis from Rs1,31,526 crore reported for November.

“The revenues for the month of December 2021 are 13 per cent higher than the GST revenues in the same month last year and 26 per cent higher than the GST revenues in December 2019,” the Ministry of Finance said in a statement.

“During the month, revenues from import of goods was 36 per cent higher and the revenues from domestic transaction (including import of services) are 5 per cent higher than the revenues from these sources during the same month last year.”

Accordingly, the overall collection includes CGST of Rs22,578 crore, SGST of Rs28,658 crore, IGST of Rs69,155 crore and cess of Rs9,389 crore.

Besides, the Centre has settled Rs25,568 crore to CGST and Rs21,102 crore to SGST from IGST as regular settlement.

Consequently, the total revenue of Centre and the States last month after settlements is Rs 48,146 crore for CGST and Rs 49,760 crore for the SGST.

“The GST collection in the month is close to Rs1.30 lakh crore despite reduction of 17 per cent in the number of e-way bills generated in the month of November, 2021 (Rs 6.1 crore) as compared to the month of October, 2021 (Rs7.4 crore) due to improved tax compliance and better tax administration by both Central and State Tax authorities.”

“The average monthly gross GST collection for the third quarter of the current year has been Rs1.30 lakh crore against the average monthly collection of Rs1.10 lakh crore and Rs1.15 lakh crore in the first and second quarters respectively.”

In addition, the ministry cited that economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST.

“The improvement in revenue has also been due to various rate rationalisation measures undertaken by the Council to correct inverted duty structure.”

“It is expected that the positive trend in the revenues will continue in the last quarter as well.”

Meanwhile the India Inc welcomed the GST Council’s decision to defer the proposed GST hike on textiles.

According to reports, the council has deferred the proposal on the back of reservations from state governments and industry.

The proposal intended to hike GST rate on apparel from 5 to 12 per cent.

“A big relief to the textile and clothing industry - we enter 2022 with a fresh bout optimism as the big fear recedes -AAa great and timely gift by the GST Council,” said Sanjay K. Jain, ICC National Textiles Committee Chairman and MD, TT Limited.

“Cannot express in words the big relief we are feeling, after living in fear from September.” According to Bimal Jain, Chair of IDT Committee PHDCCI said the deferment will give a much needed impetus and support to the sector.

“Large number of small and medium scale taxpayers were worried with the proposal to hike GST rates and this decision of GST Council is in the right direction and it is advisable to build confidence among traders before hiking GST rates in future.” Besides, the Confederation of All India Traders (CAIT) has also hailed the decision.

Furthermore, the confederation urged to postpone the decision to increase the GST rate on footwear as well.

CAIT has urged the Union Finance Minister Nirmala Sitharaman to constitute a “task force” to consider the intricacies of the taxation system, simplification and rationalisation, increase in tax base and revenue to the government.

The task force, said CAIT in a statement may be formed under the chairmanship of the Chairman of the Central Board of Indirect Taxes, which should include representatives of trade beside senior officials.