The collection of goods and services tax (GST) fell short of the expected Rs 1.5-trillion level in May, a month after hitting a record. The mop-up of Rs 1.41 trillion in May is 16 per cent (Rs 26,655 crore) lower than the record collection of Rs 1.68 trillion in April.
However, the latest figure is 44 per cent higher than Rs 97,821 crore a year ago. Also, the mop-up in May is still the fourth-highest since the inception of GST in July 2017.
The finance ministry released the provisional data on GST for May on Wednesday.
The sequential dip in the GST inflows in May was on expected lines, as the April GST collection was enhanced by year-end flows. At the same time, the high YoY growth reflects the low base of the second wave.
“The collections in May, which pertains to the returns for April — the first month of the financial year–has always been lesser than that in April, which pertains to the returns for March, the closing of the financial year,” the ministry said.
“However, it is encouraging to see that despite being the first month of the fiscal, gross GST revenues have crossed Rs 1.40 trillion — the third straight month since March,” it added.
The newly-released GST figures pertain to transactions in April but tax collected in May.
Of the total mop-up in May, Central GST (CGST) stood at Rs 25,036 crore, State GST (SGST) was Rs 32,001 crore and Integrated GST (IGST) was Rs 73,345 crore. This includes Rs 37,469 crore from import of goods and cess mop-up of Rs 10,502 crore (including Rs 931 crore from import of goods).
During the month, revenue from imports of goods were 43 per cent higher than the corresponding month last year. Collections from domestic transactions (including imports of services) was 44 per cent higher than the revenues from these sources in May 2021.
The number of e-way bills (one of the high frequency indicators) generated in April was 74 million, which is 4 per cent lower than 77 million e-way bills generated in the month of March.
Experts feels that a sustained momentum in the collection trend is likely to continue and may even exceed the budget estimates (BE).
“Given the trends for April and May, and the anticipation of a sustained healthy momentum in the absence of another Covid wave, we expect CGST inflows in FY23 to exceed the BE level by Rs 1.15 trillion, helping to absorb a part of the higher subsidy bill,” said Aditi Nayar, Chief Economist, ICRA.
In May, the government settled Rs 27,924 crore to CGST and Rs 23,123 crore to SGST from IGST. The total revenue after settlements is Rs 52,960 crore for CGST and Rs 55,124 crore for the SGST. In addition, the Centre has also released GST compensation of Rs 86,912 crores to states, the finance ministry said.
“The stability demonstrated by GST collections over the past three months is a good indicator of the growth of the economy and ties in with the other macroeconomic indicators including the GDP numbers,” said MS Mani, Partner, Deloitte India. She added that significant efforts in audits and analytics have also led to a drive against tax evaders.