03 Sep 2022 Rise in GST revenue collections.
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
News: Data released by the Finance Ministry shows that Gross Goods and Services Tax (GST) collections rose to Rs 1,43,612 crore in August (for sales in July), sequentially lower than in July but 28.2 percent higher year-on year.
Image Credit: PIB
What are the reasons for the increase in GST revenues?
- Revival in consumption.
- High inflation rate.
- Recovery from Pandemic.
- Tights checks and balances by the government.
- In the 47th GST council meeting decision to hike rate was taken partially impacting the increase in GST revenue.
- End of GST Compensation regime: Since Centre’s compensation to states for a shortfall in the revenues will end. So, SGST departments of states too are getting aggressive in terms of collections.
Government view on higher GST revenues:
The Finance Ministry said that the 28 per cent increase in GST revenue displays a “very high buoyancy”. According to Ministry of Finance positive consistent impact on the GST revenues is due to
- Various measures taken by the Council in the past such as action against tax evaders, including steps being taken by state authorities to ensure better compliance.
- Better reporting coupled with economic recovery.
- Authorities are taking more enforcement related measures in the wake of the end of the compensation regime: Even if a dealer is registered with the Centre, the state can still investigate it on a specific issue and vice-versa.
- Ministry of Finance is optimistic with current trend of GST revenue collections and optimistic that Government will cross the rough bottom line of Rs 1.40 lakh crore monthly GST.
What do the improved revenues signify?.
- Healthy trend of 28% Year-over-Year (YoY ) rise in GST collections for the second month in a row shows the sign of the economic recovery, better regulatory compliance and elevated inflation.
- Headline GST collection in July 2022 exceeded monthly average forecast of Rs 1.45 trillion for 2022.
- Prediction for Central GST collections is Rs 1.15 trillion.
- Impact of Higher GST revenue growth: It will ease the revenue concerns for states going ahead as the compensation regime for states ends in June 2022.FY 2023,may be challenging year for states with a heavy dependence on compensation, so some even resorting to higher enforcement actions to shore up revenue.
What is the detailed break-up of recent GST revenues?
- Before this, GST collections had recorded the highest-ever level of Rs 1.68 lakh crore in April 2022 for year-end sales in March.
- This is the sixth time that monthly GST collections have crossed Rs 1.40 lakh crore mark since inception of GST and fifth month in a row since March 2022. GST collections in July 2021 had stood at Rs 1,16,393 crore.
- States that recorded contraction in GST revenues are Daman & Diu, Bihar, Tripura.
- Leading states/UTs recorded a growth in GST in their respective regions, Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Uttarakhand.
- Total number of e-way bills generated in June were 7.45 crore, higher than 7.36 crore e-way bills generated in May.
- The average monthly gross GST collection for the first four months of the financial year 2022-23 has been Rs 1.50 lakh crore against the average monthly collection of Rs 1.12 lakh crore in the same period last fiscal.
- Revenue from import of goods was 48 per cent higher in July.
- Revenue from domestic transactions (including import of services) was 22 per cent higher compared to last year.
- Out of gross GST revenue of Rs 1,48,995 crore, CGST is Rs 25,751 crore, SGST is Rs 32,807 crore,IGST is Rs 79,518 crore,Cess is Rs 10,920 crore (including Rs 995 crore collected on import of goods).
Sources:-Indian Express; Department Of Revenue
Source Link:-
1.Indian Express:- https://bit.ly/3Bpih2K
2.Department of Revenue:- https://bit.ly/3QEaEtO
YojnaIAS Daily current affairs eng med 3rd Sep
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