The Goods and Services Tax (GST) collection in April this year was an all-time high at ₹1,41,384 crore as compared to an all-time low revenue of ₹32,172 crore in April 2020, which was mainly due to a nationwide lockdown that had hit the economy hard.
“Despite the second wave of Covid-19 pandemic affecting several parts of the country, Indian businesses have once again shown remarkable resilience by not only complying with the return filing requirements but also paying their GST dues in a timely manner during the month,” Union finance ministry said in a statement.
The collection in April this year is over 14% higher than the previous record of ₹1,23,902 crore in March 2021. Thus, the GST collections maintained the ₹1 lakh crore benchmark trend for the seventh consecutive month.
The steady growth in GST revenues for the last seven months clearly indicates a sustained economic recovery during this period, the statement said. After remaining in a contraction mode for six straight months since March 2020 because Covid-19 pandemic and nationwide lockdown, GST collections entered into an annualised positive growth path since September last year.
A 68-day nationwide lockdown, from March 25 last year, had a devastating impact on the economy and consequently on GST collections. It led to a 24.4% contraction of the economy in the first quarter of 2020-21, and 7.3% contraction in the second quarter, before it expanded by 0.4% in the three months ending December. Overall, the economy is expected to contract by 8% in 2020-21.
Although the Reserve Bank of India (RBI), on April 7, estimated the economy to grow at 10.5% in 2021-22 with a 26.2% growth in the first quarter of the current financial year, experts have doubts.
“Much would depend on the economic impact of Covid’s second wave currently sweeping the Indian economy. At least the projected growth at 26.2% in 1QFY22 by the RBI would be significantly adversely impacted,” said EY India chief policy advisor DK Srivastava.
MS Mani, senior director at consultancy firm Deloitte India said, “The all-time high collections, which relate to supplies made on March 21, could now give way to muted collections in the coming months due to the lower economic activities in April.”
“Most companies close their books and raise invoices during the financial close. That is perhaps one of the reasons for the spurt in GST collections in April. The real challenge lies ahead as most parts of the country are again in a lockdown and most industries are temporarily shut,” said Rajat Bose, partner at law firm Shardul Amarchand Mangaldas & Co.
According to the finance ministry, out of the Rs. 1,41,384 crore gross GST collection in April this year, ₹27,837 crore is central GST (CGST), ₹35,621 is state GST (SGST) and ₹68,481 crore is integrated GST (IGST), including ₹29,599 crore collected on import of goods, and Rs. 9,445 crore cess.