Goods and Services Tax (GST) collection crossed the Rs 1-trillion-mark for the fourth month in a row in February at Rs 1.05 trillion. The GST collection, which grew 8.3 per cent year-on-year (y-o-y) in the month, was a tad lower than Rs 1.10 trillion mopped up in the previous month.
GST collection had grown 8.1 per cent y-o-y in January. The mop-up could have been much higher, but tax on imports fell 2 per cent y-o-y. However, experts ruled out the impact of the coronavirus outbreak in China on imports since these are contracted three months in advance.
The earlier GST collection target for FY20 required January and February mop-up to be at Rs 1.15 trillion each and that for March to be at Rs 1.25 trillion. However, the Centre truncated the target for its part of the GST, compensation cess and integrated GST by Rs 51,000 crore in the revised estimates for FY20.
The collections have exceeded Rs 1-trillion-mark each month since November. However, experts said it could be due to blockage of input credits. “One will have to see how much of it is due to restriction and blockage of input credits, which has been happening in the last three months or so,” said Pratik Jain, partner PwC.
He said the GST Council should look into this since it could lead to a fall in the GST collections later.
M S Mani, partner at Deloitte India, said the February figures reflected significant ground level measures taken in the past few months. “With e-invoicing and new returns on the anvil, the collections are now expected to continue with the stable trend,” he said.
Of total GST, Central Goods and Services Tax (CGST) fetched Rs 20,569 crore in February, slightly lower than Rs 20,944 crore in January. The State Goods and Services (SGST) collections stood at Rs 27,348 crore, less than Rs 28,224 crore in the previous month.
Integrated Goods and Services Tax (IGST) yielded Rs 48,503 crore in the month, down from Rs 53,013 crore in January. Within IGST, the portion from imports fell to Rs 20,745 crore, from Rs 23,481 crore in January.
Compensation cess was at Rs 8,947 crore, higher than Rs 8,637 crore in the previous month.
Abhishek Jain, partner at EY, said the GST collections continuing at above the Rs 1-trillion-mark is an encouraging sign for the Indian economy.
The government has settled Rs 22,586 crore to CGST and Rs 16,553 crore to SGST from IGST as regular settlement. The total revenue earned by the Centre and the states after regular settlement stood at Rs 43,155 crore and Rs 43,901 crore, respectively, for the month.
The GST revenue from domestic transactions showed a growth of 12 per cent y-o-y in February. Taking into account the GST collected from import of goods, the total revenue increased by 8 per cent on the yearly basis.