GST collection for July at over Rs 1.16 lakh crore

After a one-month blip, the Goods and Services Tax (GST) collection picked up the pace again in July, with revenues topping Rs 1 lakh crore and helping the government contain the Budget deficit to an eight-year low despite the Covid second wave disrupting a large part of the economy.

The Centre and states together collected Rs 1.16 lakh crore of GST in July. This is the second-highest collection so far this financial year after Rs 1.41 lakh crore in April. The GST collection had dipped to Rs 92,849 crore in June.

The revenue for July is 33% higher than in the corresponding period last year when most of the economic activities came under the impact of the first wave.

The finance ministry said the robust GST revenues were likely to continue in the coming months as well.

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“With the easing of Covid restrictions, GST collection for July 2021 has again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace. The robust GST revenues are likely to continue in the coming months too,” it said in a statement.

The tax buoyancy helped the Centre cut its fiscal deficit in the April-June quarter to an eight-year low.

The gross GST revenue collected in the month of July 2021 was Rs 1,16,393 crore, of which the Central GST was Rs 22,197 crore, State GST Rs 28,541 crore, Integrated GST Rs 57,864 crore (including Rs 27,900 crore collected on import of goods) and cess was Rs 7,790 crore (including Rs 815 crore collected on import of goods).

“The improvement in GST collections both on domestic transactions and imports, accompanied by the fact that major producing states have shown significant increases would indicate that economic activities have resumed across the country,” Deloitte India Senior Director M S Mani said.

“While GST collections in July 2021 have displayed a heartening sequential increase, as well as a substantial YoY growth, their level remains well below the all-time high recorded in April 2021. In our view, this is further evidence that the graduated unlocking in June 2021 has triggered an incomplete recovery, which is expected to strengthen in July 2021, further boosting the August 2021 GST collections. The pace of growth across the states was highly uneven in July 2021, with some industrial heavyweights recording a sharp expansion,” Aditi Nayar, chief economist, ICRA, said.