Record GST Collection

Table of Contents

GST Collection Highlight

Revenue for October 2022 is second highest monthly collection, next only to the collection in April 2022.
- GST Collections in April, 2022 was ₹1,67,540 crore.
This is the ninth month and for eight months in a row, that the monthly GST revenues have been more than the ₹ 1.4 lakh crore mark.
- Second time the gross GST collection has crossed Rs. 1.50 lakh crore mark.
Regional Variation in Collection: Haryana recorded a 37% growth, followed by Karnataka (33%), Kerala (29%), West Bengal (26%) and Tamil Nadu (25%).
- Revenues grew slower than the national average in Gujarat and Telangana (11%), Madhya Pradesh and Rajasthan (10%) and Uttar Pradesh (16%).
- Six States clocked negative growth, Chhatisgarh (-3%), Assam (-13%), Mizoram and Manipur (-23% each) and Bihar (-1%).
Reasons: High inflation rate, increase in retail prices of many consumption goods, the festive season demand, and actions taken to ensure compliance supported the rise in GST collections.
Concern: Pace of year-on-year growth in GST collections moderated to 16.6 per cent in October from over 25 per cent each in last three months.

Reflect onset of the festive season: At least 12 states/UTs recorded a higher than 20 per cent growth in GST collections in their regions.
Stable GST Regime: GST has now settled, proper systems are in place and compliance level has increased substantially.
Economic Recovery: Uptrend in GST revenues signify rebound in economic recovery.
Recovery in Manufacturing activities in India: Manufacturing sector remained robust and price pressures were contained in October as new orders and production rose at a slower but stronger pace.
Higher Buoyancy: Revamped focus of the government on tax collections can lead to further increase in collections in the coming months.
Fiscal Deficit in Limit: GST collections are expected to overshoot the budgetary targets set for this fiscal.

GST is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc.
GST is levied on the supply of goods and services. GST is a single domestic indirect tax law for the entire country.
The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.
It is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.

GST has brought together a number of indirect taxes under one umbrella, simplifying taxation for service and commodity businesses.
Costs of products and services will be reduced in the long run with the introduction of GST. This is because the cascading effect of a series of VATs and taxes has now been erased.
GST is aimed at reducing corruption and sales without receipts.
GST brings accountability and regulation to unorganised sectors such as the textile industry.
GST brings uniformity in the taxation process and allows centralised registration. This reduces the multiplicity of taxes as they do not have the resources to hire tax experts.
GST reduces logistics cost by eliminating border taxes and resolving check-post discrepancies.
Positive impact on India’s GDP. It is expected to increase by at least 80% within the next couple of years.
Possibility of tax evasion is minimised completely with GST coming into action.

Increased costs of software purchase that can assist in GST filing process leads to higher operational costs for many businesses.
GST has given rise to complexity for many business owners across the nation.
GST has received criticism for being called a ‘Disability Tax’ as it now taxes articles such as braille paper, wheelchairs, hearing aid etc.
The complexities in taxation for products have seen manufacturers suspend their reward programs, which are sure to affect consumers.
The GST transaction fees within the financial sector have become more expensive increasing from 15% to 18%.
With GST, insurance premiums have become more expensive.
The impact of GST on the real estate market caused an 8% increase on real estate price leading to 12% fall in demand closely after it was brought into action in June, 2017. This however, may be a short-term trend.
Petrol is not under GST, which goes against the ideals of unification of commodities.