Gross goods and services tax (GST) in July (for June sales) rebounded from Rs 1-lakh-crore to Rs 1.16.393 crore, data released by the Treasury Department on Sunday showed.
July GST surveys were up 33 percent from the corresponding period last year and 25.4 percent from the previous month, suggesting a pick-up in economic activity after a series of localized lockdowns in May during the second wave of the Covid-19 pandemic suggests.
GST collections had fallen to a 10-month low of Rs 92,849 crore (for May sales) in June after exceeding Rs 1 lakh crore for eight months. In July 2020, GST revenues were recorded at Rs 87,422 billion.
GST sales for June 2021 are the second highest this fiscal year after collecting Rs 1.41 Lakh Crore in April, which was sold in March of the previous fiscal year but will be booked in the new fiscal year.
Experts said GST revenues are expected to pick up in the coming months, although a possible third wave of the pandemic remains a risk.
The Treasury Department said in its statement that the decrease in GST revenue in June was mainly due to the situation in May when most states and union territories were completely or partially closed.
“With the covid restrictions eased, the July 2021 GST survey again exceeded Rs 1 lakh crore, clearly indicating that the economy is recovering quickly. The robust GST revenue is likely to continue for the coming months, ”the ministry said.
MS Mani, Senior Director of Deloitte India, said the sharp increase in collections for June shows the resumption of economic activity and will raise expectations for better collections in the months ahead.
“The improvement in GST surveys for both domestic transactions and imports, accompanied by the fact that the major producing countries have seen a significant increase, would suggest that economic activity has resumed across the country,” he said .
Andhra Pradesh, Telangana, Tamil Nadu, Kerala, Gujarat, Chhattisgarh, Haryana, and Punjab were some of the major states to see gross GST revenue growth of over 25 percent in June. Gross GST revenue includes revenue for both the state and the center and is an indicator of economic activity in the region.
GST revenues are expected to increase in the future unless economic activities are hampered by a sharp surge in coronavirus infections. “The collections in July showed a strong increase compared to June due to the economic recovery due to the business release in June. If the country can withstand the third wave, GST surveys should increase from then on, ”said Rajat Bose, partner at Shardul Amarchand Mangaldas & Co.
The gross GST revenue accumulated in the month of July 2021 is Rs.116.393 billion, of which the central GST is Rs 22.197 billion, the state GST is Rs 28.541 million, and the consumption is Rs 7.790 crore (including Rs 815 crore collected for imports), the ministry said.