NEW DELHI: The Goods and Services Tax (GST) collection in February crossed the ₹1.30 lakh crore mark for the fifth time since the regime’s inception in July 2017 despite a pandemic situation in January. The February collections indicate the actual volume of business transactions that took place in the previous month.
The gross GST revenue in February of ₹1,33,026 crore is the third-highest. According to the official data, it is 18% higher than the revenues collected same month the previous year and 26% higher than revenues of February 2020. At ₹1,40,986 crore, the GST collections were a record high in January 2022 followed by ₹1,39,708 crore in April 2021.
“February, being a 28-day month, normally witnesses revenues lower than that in January. This high growth during February 2022 should also be seen in the context of partial lockdowns, weekend and night curfews, and various restrictions that were put in place by various states due to the omicron wave, which peaked around 20th January,” Union finance ministry said in a statement on Tuesday.
Since the implementation of GST, for the first time, GST cess collection crossed the ₹10,000 crore mark, which signifies recovery of certain key sectors, especially automobile sales, it added.
At the time of introducing the new indirect tax regime in July 2017, the GST law assured states a 14% increase in their annual revenue for five years and guaranteed them that their revenue shortfall would be made good through the compensation cess levied on luxury goods and sin products such as liquor, cigarettes, aerated water, automobiles, coal, and tobacco.
“As per the law, states will not get compensation after June 30, 2022. The cess will, however, continue till March 2026 to service the old debts taken to pay compensation to states when GST revenue fell sharply due to sudden outbreak of Covid-19 pandemic in 2020,” a government official said, requesting anonymity.
MS Mani, partner at Deloitte India, said the robust revenues show both resilience of the economy and efficiency in tax administration. “GST collections exceeding ₹1.33 lakh crore, despite the challenging pandemic situation in January 2022, indicates that the collections are now on a stable trajectory and the FY22 targets would be exceeded,” he said.
Experts said future collections would remain at the same range due to ease of compliance and tighter tax administration. “The data analysis conducted by the authorities have also controlled evasion to a large extent. The GST audits for March 21 have also been completed on 28th February. Balance tax payable due to errors and omissions has also led to higher collections. The growth trajectory in collections should now be in this range,” said Parag Mehta, partner at consultancy firm NA Shah Associates.
According to the Union finance ministry, the ₹1,33,026 crore gross revenue collected in February included ₹24,435 crore central GST (CGST), ₹30,779 crore state GST (SGST), and ₹67,471 crore integrated GST (IGST). The IGST component included ₹33,837 crore collected on the import of goods. The total compensation cess collected in the month was ₹10,340 crore, including ₹638 crore collected on import of goods.
The government has settled ₹26,347 crore to CGST and ₹21,909 crore to SGST from IGST. The total revenue of the Centre and the states in February 2022 after a regular settlement is ₹50,782 crore for CGST and ₹52,688 crore for the SGST, it added.