In a remarkable turn of events, the goods and services tax (GST) collections for April skyrocketed, crossing the unprecedented threshold of ₹ 2 lakh crore for the first time. This surge, a 12.4% increase from previous records, owes its success to year end sales and enhanced compliance, marking a potential turning point for the nearly-seven-year-old indirect tax regime.
Driven predominantly by domestic demand, the latest data unveiled by the finance ministry showcases a significant uptick in GST collections, estimated at over ₹ 2.1 lakh crore for April. Notably, the mop-up from domestic transactions surged by 13.4%, while imports contributed to an 8.3% increase. After refunds were factored in, the net GST revenue surged by an impressive 15.5%, totaling ₹ 1,92,000 crore.
Experts hail this achievement as a reflection of improved business compliance. M S Mani, a partner at Deloitte India, emphasised, ‘These collections could be the tipping point in the GST collection trajectory…reflective of significant improvements in compliance by businesses.’
Finance Minister Nirmala Sitharaman took to Twitter to express her delight, stating, ‘GST collection crosses ₹ 2 lakh crore benchmark, thanks to the strong momentum in the economy and efficient tax collections.’
The success story began with stringent measures against bogus registrations and fake invoices, coupled with tightened norms and data analytics interventions.
States witnessed varied growth patterns, with Mizoram leading the charts with an impressive 52% surge in April. However, Sikkim, Nagaland, Meghalaya, and Jammu & Kashmir experienced marginal declines. Among larger states, Uttar Pradesh recorded a commendable 19% increase, followed closely by Maharashtra, Gujarat, Karnataka, and Tamil Nadu.
Looking ahead, experts anticipate further growth with the promise of upcoming GST reforms. Partik Jain, a partner at PwC India, suggests, ‘With the next wave of GST reforms expected after the formation of a new govt, growth may be further accelerated…bold decisions, such as rate rationalisation or bringing products such as ATF and natural gas under GST ambit, may be on the horizon.’
