Year end sales and better compliance helped GST collections soar past the £20 bn mark for the first time, with experts suggesting that this could be a tipping point for the nearly-seven-year-old indirect tax regime.
Based on transactions in March, the latest data released by the finance ministry estimated a 12.4% increase in GST collections, pegged at over £21 bn in April, driven largely by domestic demand. The mop-up from domestic transactions was seen to have risen 13.4%, while from imports was up 8.3%. After accounting for refunds, the net GST revenue went up 15.5% to £19.2 bn. The numbers buoyed the mood in govt.
“GST collection crosses £20 bn benchmark, thanks to the strong momentum in the economy and efficient tax collections,” finance minister Nirmala Sitharaman tweeted.
Congratulations to the Central Board of Indirect Taxes & Customs, dept of revenue, all officers at the state and central levels. Their sincere and collaborative efforts have achieved this landmark,” Sitharaman tweeted. Post-Covid there has been a consistent rise in collections. It started with the crackdown on bogus registration and fake invoices along with tightening of norms, with data analytics playing a key role.
Within the levy, the sharpest increase of 14.1% was seen in the case of central GST. Experts suggested that with collections showing a strong growth, it was time for the Centre and states to move ahead with long-pending reforms. “With the next wave of GST reforms expected after the formation of a new govt, growth may be further accelerated,” said Partik Jain, partner at PwC India.
