In May, India’s gross Goods and Services Tax (GST) collections totaled 1,40,885 crore, up 44 percent from a year ago, with receipts from domestic transactions and services imports rising at the same rate, and goods imports delivering 43 percent higher taxes.
“This is only the fourth time since the beginning of GST that monthly GST collection has exceeded Rs.1.40 lakh crore, and the third month in a row since March 2022,” the Finance Ministry stated.
Always been smaller than April’s GST revenues
The Ministry explained that the revenues in May are for transactions completed in April and have ‘always been smaller than April’s GST revenues, notwithstanding the record 1.677 lakh crore GST inflows in April 2022. GST collections in April are based on returns filed in March for the fiscal year’s end, according to the report.
“However, it is good to observe that gross GST collections have surpassed Rs.1.40 lakh crore even in the month of May 2022.” The overall number of e-way bills created in April 2022 was 7.4 crore, down 4% from 7.7 crore in March 2022, according to a statement from the Ministry.
After several months, revenue growth from domestic transactions, including service imports, has surpassed revenue growth from goods imports. For example, domestic transaction revenues increased by 17% in April 2022, while goods imports increased by 30%.
Central GST collections totaled 25,036 crores
In May, Central GST collections totaled 25,036 crores, State GST collections totaled 32,001 crores, and Integrated GST collections were 73,345 crores, including 37,469 crores collected on imports of commodities.
Compensation for GST Cess inflows, which are used to compensate states, totaled 10,502 crores, including 931 crores collected on goods imports). This was just slightly less than the amount collected in April, which was Rs. 10,649 crore.
While the sequential drop in GST inflows in May was to be expected, Aditi Nayar, chief economist at rating agency ICRA, pointed out that the high year-on-year rise reflected the low base from the second COVID-19 wave.
“In the absence of another Covid breakout or substantial disruptions, a prolonged solid momentum of business might enable central GST inflows to exceed Budget expectations by Rs.1.15 lakh crore, helping absorb a portion of the Centre’s increased subsidy expense,” she said.
Other southern states had a mixed track record
Other southern states had a mixed track record. Tamil Nadu saw a 41 percent increase in revenue, while Andhra Pradesh, Kerala, and Telangana saw growth rates of 47 percent, 80 percent, and 33 percent, respectively.
“The steadiness evidenced by GST revenues above 1.4 lakh crore in the last three months is a solid indicator of the economy’s growth and correlates with other macroeconomic indicators.” Significant auditing and analytics efforts have also resulted in a push against tax evaders, instilling a tax compliance culture,” said M.S. Mani, partner at Deloitte India.