Economy booming: GST collection in May also exceeds Rs 1.4 lakh crore
Goods and Services Tax (GST) collections crossed the 1.4-trillion mark for the third consecutive month in May 2022 and fell to the fourth highest level since the launch of the comprehensive consumption tax nearly five years ago. The steady jump in GST receipts over the past few months indicates that the economic momentum has not been severely affected by external constraints. Expansion of tax base, less evasion and higher price levels in commodities, raw materials and finished goods are also increasing tax collection.
According to official data released on Wednesday, gross GST revenue in May 2022 grew 44 per cent year-on-year to about Rs 1.41 lakh crore.
A sustained spurt in GST collections for several months in a row will help allay the concerns of state governments that they may have to deal with a revenue shock after the five-year revenue protection period ends on June 30. For the Centre, if the trend continues to be higher-than-estimated mop-up, its share of GST revenue will be much higher than the Budget Estimate (BE) of Rs 6.6 trillion for FY13.
GST collection picked up despite consumption in the economy slowly recovering from the low levels caused by the pandemic. Growth in private consumption expenditure declined from 10.5% in Q1FY22 to 7.4% in Q3FY22 and 1.8% in Q4.
A senior official recently told FE that the gross GST revenue in FY23 could average Rs 1.3-1.35 trillion per month (about Rs 16 trillion a year), which could mean the Centre’s fiscal year 23 GST revenue could be higher by around Rs 60,000 crore. BE, after adjustment of cess collection, which is to be used mainly to service the loans taken in the last two years to bridge the revenue shortfall of the states from the protected levels in FY 2011 and FY 2012.
The average monthly GST collection in FY22 stood at Rs 1.23 trillion. The Budget for FY 2013 has projected an average monthly GST collection of Rs 1.2 trillion in the year.
Most of the large states including Tamil Nadu, Maharashtra, Uttar Pradesh and Karnataka registered 40-60% growth in GST collections in May 2022.
“Collection in May, which relates to returns for April, the first month of the financial year, has always been lower than that of April, which pertains to returns for March, the closing of the financial year. However, it is encouraging to see that even in the month of May 2022, the Gross GST Revenue has crossed Rs 1.4 trillion,” the Finance Ministry said in a statement.
The total number of e-way bills in April 2022 was 7.4 crore, which is 4% less as compared to March 2022.
During May, revenue from import of goods was 43% higher and revenue from domestic transactions (including import of services) was 44% higher than revenue from these sources during the corresponding month of the previous year.
“The gross GST revenue collected in May is Rs 1,40,885 crore, of which CGST is Rs 25,036 crore, SGST Rs 32,001 crore, IGST Rs 73,345 crore (including Rs 37,469 crore collected on import of goods) and cess is Rs 10,502 crore. (including Rs 931 crore collected on import of goods),” the ministry said.