The gross Goods and Services Tax (GST) collections in the month of July (for sales in June) rebounded over the Rs 1-lakh-crore mark to Rs 1,16,393 crore, data released by the Finance Ministry on Sunday showed.
GST collections in July have increased 33 per cent from the corresponding period last year and 25.4 per cent over the previous month, indicating a pickup in economic activity after a series of localised lockdowns in May during the second wave of the Covid-19 pandemic.
GST collections had dropped to a 10-month low of Rs 92,849 crore in June (for sales in May) after topping the Rs 1-lakh-crore mark for eight months. In July 2020, the GST revenue was recorded at Rs 87,422 crore.
The GST revenue for June 2021 is the second-highest in this fiscal after the Rs 1.41 lakh crore collection in April, which is for sales in March of the previous fiscal, but gets accounted in the new fiscal year. Experts said GST revenues are expected to pick up in the coming months, even though a possible third wave of the pandemic remains a risk.
The Finance Ministry in its statement said the fall in GST revenue in June was predominantly related to the situation in May, when most states and Union Territories were under complete or partial lockdown.
“With the easing out of Covid restrictions, GST collection for July 2021 has again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace. The robust GST revenues are likely to continue in the coming months too,” the Ministry said.
Deloitte India Senior Director M S Mani said the sharp increase in collections for June indicates the resumption of economic activities, and will raise expectations of better collections in the coming months.
“The improvement in GST collections both on domestic transactions and imports, accompanied by the fact that major producing states have shown significant increases, would indicate that the economic activities have resumed across the country,” he said.
Andhra Pradesh, Telangana, Tamil Nadu, Kerala, Gujarat, Chhattisgarh, Haryana, and Punjab were some of the major states that recorded over 25 per cent growth in gross GST revenue in June. Gross GST revenue includes revenues for both states and the Centre, and is an indicator of economic activity in the region.
GST revenues are expected to rise going forward if economic activities are not hampered by a major surge in coronavirus infections. “Collections in July have seen a sharp uptick as compared to June on the back of economic revival due to the unlocking of businesses in June. If the country is able to resist the third wave, GST collections should increase from hereon,” Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co said.
The gross GST revenue collected in the month of July 2021 is Rs 1,16,393 crore of which central GST is Rs 22,197 crore, state GST is Rs 28,541 crore, Integrated GST is Rs 57,864 crore (including Rs 27,900 crore collected on import of goods), and cess is Rs 7,790 crore (including Rs 815 crore collected on imports), the Ministry said.