During September, the revenues from domestic transaction (including import of services) are 20% higher than the revenues from these sources during the same month last year.Gross goods and services tax (GST) collections came in at Rs 1.17 lakh crore in September (largely August transactions), up 23% on year and 4.5% on month, signalling a sustained pick-up in trade and commerce.
Data released separately said the Nikkei manufacturing PMI rose to 53.7 in September from 52.3 in the previous month; also, average daily e-way bill generation in the first 26 days of September was 3% higher than the level in August.
The output of eight core infrastructure sectors grew 11.6% in August from a year before and exceeded even the pre-pandemic level (same month in FY20) for a second straight month (by 5.4%). Of course, the growth was aided by a favourable base effect (the index had contracted by 6.9% in August 2020 in the wake of the pandemic and 0.2% in August 2019). Still, the latest expansion – driven partly by increased output of cement, natural gas and coal – points at a nascent recovery in the industrial sector.
The average monthly gross GST collection for the second quarter of the current financial year has been Rs 1.15 lakh crore, which is 5% higher than the average monthly collection of Rs 1.1 lakh crore in the first quarter of the year. “This clearly indicates that the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, especially action against fake billers have also been contributing to the enhanced GST collections. It is expected that the positive trend in the revenues will continue and the second half of the year will post higher revenues,” the ministry of finance said in a statement.
The Centre released GST compensation of Rs 22,000 crore to states to meet their GST revenue gap, the ministry added.
The Centre’s net tax receipts rose 127% on year to Rs 6.45 lakh crore or 41.7% of FY22BE in the April-August period, compared with just 17.4% of the corresponding target reported in the year-ago period.
Even as the weighted average GST rate continues to be around 11% against the revenue-neutral rate computed of a little over 15% and major items like auto fuels are still outside the net, the collections have shown an upswing for several months till the pandemic’s second wave hit businesses, recovering quickly after taking a hit in June (Rs 92,849 crore).
During September, the revenues from domestic transaction (including import of services) are 20% higher than the revenues from these sources during the same month last year.
Of the gross GST revenue collected in September 2021, central GST was Rs 20,578 crore, state GST Rs 26,767 crore, integrated GST Rs 60,911 crore (including Rs 29,555 crore collected on import of goods) and cess Rs 8,754 crore (including Rs 623 crore collected on import of goods).
GST collections from key manufacturing states such as Maharashtra, Tamil Nadu, Gujarat and Karnataka showed year-on-year growth of 21-29% in September.
The government has settled Rs 28,812 crore to CGST and Rs 24,140 crore to SGST from IGST as regular settlement. The total revenue of Centre and the States after regular settlements in the month of September 2021 is Rs 49,390 crore for CGST and Rs 50,907 crore for the SGST.
For the second year in a row, the Centre will borrow under a special, relatively low-cost mechanism in 2021-22 to bridge a yawning shortfall in the GST compensation cess pool and transfer the funds to states as back-to-back loans sans any big fiscal cost to states. The plan is to borrow under this window Rs 1.59 lakh crore in 2021-22.
While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore, the Centre recently acknowledged in Parliament that an amount of Rs 81,179 crore was yet to be released to the state governments towards fully compensating them for their GST revenue shortfall for the financial year 2020-21.
