GST collection 2nd highest in October 2022: Festive sales to higher imports – here are the top 5 factors, experts list
GST Collection: According to economists and other experts, the revival in the rural economy and festive season sales have contributed most to the GST collection in October 2022.
GST Collection: The goods and service tax (GST) collection were reported second highest in October 2022, according to the recent data released by the Ministry of Finance. GST collection for the previous month stood at Rs 1.52 lakh crore. April 2022 has seen the highest-ever GST collection, as per data.
According to economists and other experts, the revival in the rural economy and festive season sales have contributed most to the GST collection in October 2022.
GST collections for the last seven months have been consistently higher than pre-covid levels. The trend continues even in October, making eight months in a row.
Here are five main causes pointed out by the experts that led to the spike in GST collection in October:
Festive season sale: After two years, people celebrated festivals across the country. Be it the Ganapati festival in Maharashtra, Durga Puja in West Bengal, or Diwali, things have been restored to normalcy for the first time after the pandemic, as experts said.
The sharp sequential pickup in the headline GST collections in October 2022 reflects a combination of quarter-end flows relating to the transactions in the previous month, as well as the surge in GST e-way bills ahead of a robust festive season.” Aditi Nayar, chief economist, at ICRA said.
She added that the generation of GST e-way bills is expected to have remained high, which should bolster the GST collections of November 2022.
High Imports: Experts pointed out that India has performed considerably well in terms of imports and that contributed significantly to October GST collections.
“Revenue contributed by the imports are on the er side. The huge spike in the imports is reflected in the trade deficit,” Najib Shah, Former Chairman, of the Central Board of Indirect Taxes and Customs.
Rural economy revival: According to Shah, the rural economy has contributed significantly to the GST collection in October. The consumption pattern depends a lot on how the rural economy does. The two-wheeler sale has done well (in rural areas) in the last month, so it got reflected in the revenue.
Soaring inflation: With CPI (Consumer Price Inflation) crossing 6 per cent, the prices of goods have gone up. With high inflation, the taxes are also expected to go up, experts believe.
“Higher GST collection could be attributed to soaring inflation for the past couple of months. A consistently higher GST collection is a sign of strong recovery post-covid despite weaker global cues,” said Saket Patawari, Executive Director of Indirect Tax, NEXDIGM, a tax consulting and accounting service provider.
Better scrutiny: There is a greater emphasis on complaints lodged and vigilant data analytics being done to keep an eye on the market, experts mentioned. Thus, there are more detection of cases and lesser evasion, which eventually resulted in better revenue.
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