New Delhi: Monthly Goods and Services Tax (GST) receipts of the central and state governments are set to cross ₹1.2 trillion in March, the highest ever since the indirect tax reform in 2017.
The growth in revenue is expected amid the government’s drive against fake invoices and rule changes meant to ensure that transaction details are reported in time by businesses, a person familiar with the development said.
The finance ministry is expected to report Goods and Services Tax collection figure later today. The highest ever monthly receipts are set to come at the end of a financial year in which the economy has suffered a major stress on account of the pandemic.
The trend indicates that the fruits of greater transparency in the reporting of economic activity, brought about by GST, is beginning to tell on revenue receipts sustainably. The authorities have in the last few months stepped up reporting requirements and have scaled back input tax credit availability to businesses in cases where their suppliers have not uploaded details of the transaction details in a designated portal. This puts the onus of ensuring tax compliance by suppliers of raw materials and services on the businesses that source these items from them.
Also, the drive against fake invoices since mid-November have led to arrests of several chartered accountants and entities. GST revenue, which fell sharply from year ago levels in April and May last year due to the disruption caused by the national lockdown has since recovered. Since September, collections have been higher than the year-ago levels. The revenue lost during the initial months of FY21 had also caused stress in central-state relations around the GST compensation issue.