Gross Goods and Services Tax (GST) collections hit a three-month low in December at ₹1,29,780 crore, 26% higher than the pre-pandemic levels of December 2019 and 13% more than the same month in 2020.
Revenues from import of goods in December were 36% higher than in 2020 , while those from domestic transactions, including the import of services, were 5% more than the same month last year.
The Finance Ministry highlighted that GST collections in December, reflecting transactions undertaken in November, were ‘close to Rs 1.30 lakh crore despite a 17.5% reduction in the number of e-way bills generated in the month of November’ compared to October.
In October, 7.4 crore e-way bills were generated, resulting in revenues of ₹1,31,526 crore in November. While e-way bills fell to ₹6.1 crore in November, revenues only slipped by 1.33% month-on-month in December, which the ministry said was 'due to improved tax compliance and better tax administration by both Central and State Tax authorities'. November's GST revenues were the second highest since the introduction of this indirect tax regime in July 2017.
“The average monthly gross GST collection for the third quarter of the current year has been ₹1.30 lakh crore against the average monthly collection of ₹1.10 lakh crore and Rs 1.15 lakh crore in the first and second quarters, respectively,” the ministry said in a statement, adding that it expects the ‘positive trend’ to continue in the last quarter of 2021-22.
“Coupled with economic recovery, anti-evasion activities, especially action against fake billers have been contributing to the enhanced GST. The improvement in revenue has also been due to various rate rationalization measures undertaken by the Council to correct inverted duty structure,” the revenue department explained.
MS Mani, Deloitte India partner said the GST revenues were robust despite a reduction in the e-way bill generation possibly due to ‘higher collections from the services sector accompanied by a continuing focus on implementation of technology based anti-evasion measures’.
While revenues from domestic transactions were up 5% year-on-year in December, there was a significant variation among collections in different States, with revenues falling by 4% in Tamil Nadu and by 2% in Rajasthan, Gujarat and Andhra Pradesh.
West Bengal and Bihar both saw a 10% decline in revenues, while Uttar Pradesh recorded a marginal 2% rise. Maharashtra, on the other hand, clocked a healthy 11% revenue growth, while Karnataka revenues rose 12%.
ICRA chief economist Aditi Nayar noted that the revenue from the domestic transactions reported a relatively lower growth in December, perhaps owing to the continuing drag imposed by the delayed recovery in contact-intensive services.
The overall GST kitty for December, she said, can be attributed both to anti-evasion activities as well as the sharp growth in revenue from imports.