Goods and Services Tax (gst) collections in December (for November sales) increased 11.6% year-on-year to Rs 1,15,174 crore, the highest level since the implementation of the indirect tax regime in July 2017.
- The finance ministry said this was the strongest growth in monthly income in the past 21 months. “This is due to the combined effect of the rapid post-pandemic economic recovery and the national campaign against GST fraudsters and fake invoices as well as many systemic changes introduced recently, which have led to better compliance,” did he declare.
- The trend so far: After the covid-19 pandemic epidemic, GST revenue collection had declined and was at a lower level than the previous year. GST's revenue collection remained in negative territory for the first five months of this fiscal year, with a record collection of Rs 32,172 crore in April, after the country was locked down following the Covid-19 pandemic.
- With the opening of the economy and the resumption of economic activities, GST's revenues started to rebound from September. December marked the fourth month in which GST revenue collection recorded year-over-year growth. The percentage increase is also partly helped by a weak base effect.
- Reasons for the rebound: gst collections in December (for sales in November) were supported by an increase in holiday season sales due to Diwali in November as well as the rollout of new technology e-invoicing systems and measures against tax evaders.
- Tax experts noted that the government should provide a breakdown of GST revenue collected through tax filing and collection campaigns by GST authorities to help assess the true picture of the scale. of economic recovery.
- The proposed extension of electronic invoicing to all businesses will further prevent the leakage of GST revenue. Under GST laws, electronic invoicing of B2B transactions has become mandatory for companies with turnover exceeding Rs 500 million since October 1 of last year.
- They have been informed that it will be rolled out to companies with turnover exceeding Rs 100 million from January 1 of this year and will likely roll out to all companies from April 1.
- The electronic invoicing system is connected to a central portal which receives and validates invoices in real time and will eventually replace the electronic invoicing system.
- It was seen as a major change to tackle tax evasion and plug leaks, which in turn may not even require an urgent deployment of the new GST tax reporting system that could have resulted in a new start for tax assessors under the indirect tax regime.