Collections from the goods and services tax (GST), a barometer of economic health, are expected to exceed one million lakh crore rupees in October for the first time in eight months since the coronavirus disease (Covid-19) pandemic ) seized over India and forced a national shutdown. according to two officials with direct knowledge of the situation.
Available data shows GST’s revenue accruals for the month have been strong as more business emerged from the shutdown, economic activity gained further momentum and the holiday season gave a boost to household consumption, officials said on condition of anonymity.
According to the GST filing, the indirect tax collection in October “could be more than Rs 1 lakh crore,” one of the officials said. That goes for returns filed through GST form number 3B (GSTR-3B), a monthly summary of transactions filed by taxpayers prior to October 20, the last date for filing GST returns for the previous month. More than 1.1 million GSTR-3B filings had been filed on October 20, compared with 485,000 on the same day last year, the first official said.
That is good news for the government, which is borrowing Rs 1.1 lakh crore to compensate states for a portion of the estimated deficit of Rs 2.35 lakh this fiscal year in their share of GST revenue.
The Covid-19 disease outbreak forced a hard 68-day lockdown from March 25, forcing the temporary shutdown of manufacturers and service providers in all sectors except those deemed essential. These were gradually loosening.
Tax collection recovered for the first time since March in September with a modest year-on-year increase of 4% to Rs 95,480 crore.
The second official quoted above said that revenue collection is also expected to increase due to improved application systems such as electronic invoicing and the use of AI to verify revenue loss. The government introduced the electronic invoicing system on October 1 for companies with an annual turnover of more than 500 million rupees per year; Before January 1, the turnover threshold can be lowered to Rs 100 million.
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