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With GST collections being surged at record high numbers, can we say the economy is on road to recovery?

GST: After the destruction that COVID-19 caused to the whole country, the economy needed a revival. The entire nation was locked down for more than a year, and there were no economic activities. Shops were closed, and businesses were shut, and therefore the real economic progress halted. After a few months, many big companies started work from home, but much of the work was still impossible through computers.

All the shop owners, vendors and small business people had nothing to do, and therefore there was deficient economic activity throughout the nation. We all know its result as we all are aware of the contraction in the levels of GDP. However, the rollout of vaccines proved to be very helpful for the economy to gain its revival. Undoubtedly, the start of the vaccine rollout was plodding and relatively ineffective, but a few months down the line, we have established a powerful vaccination system.

Recently, our country also recorded one billion vaccination jabs in the nation, which is enormous and is great news for the whole country. Moreover, the second wave of the COVID-19 virus was utterly devastating. So many lives were lost, and so many families were broken, destroying our healthcare sector. However, the situation is also under control now. With the falling number of daily cases and the rising number of daily vaccination jabs, is the country witnessing a revival of its economy? The answer to this question is a big yes.

GST collection for October- 1614600807 3248

The halted consumer demand during the pandemic has been very significant now, as the country is witnessing a sudden spike in consumer demand both domestically and internationally. But we do need a piece of solid evidence that the country’s economy is reviving and thereby growing, right? Well, here comes the topic for today, Goods and Services Tax.

A clear indicator of how well the economy is performing, the goods and services tax level has been very high for the past few months. IN OCTOBER, the GST collection level had been the second-highest since the beginning of the tax regime in July 2017. Therefore it signifies how well our economy is performing.

In October, the Goods and Services Tax revenue collection rose by 23.7 per cent year on year and reached Rs 1,30,127 crore. This level is so huge that it has been the second-highest monthly collection rate under the GST regime ever since it started in 2017. This high level of collection has been possible only because of two essential things – the first is the pickup in economic activities of the country, which was halted for a very long time.

It is why the consumer demand spiked, too, giving the boost to the economy, which is needed. The second reason behind this enhanced level of GST revenue collection is the tax authorities’ several compliance measures to curb the rising tax evasion.

At a massive level of 1,40,384 in April of this year, which indicated the year-end sale, the level of GST collections had been the highest so far in the indirect tax regime.

Let us now discuss the components of Tax to know better about the current scenario. gst

Out of the total 1,30,127 crore collected through the GST revenue collections, Central GST is the lowest of them all and accounts for a level of 23,861 crores. On the other hand, the collective state GST accounted for 30,421 crores. The story of integrated GST is as high as 67,361 because it also includes the revenue collected on imports of goods which was 32,998 crores. At last, the level of cess in this month accounted for a sum of Rs 8,484 crores.

The government has settled for Rs 27,310 crore to CGST, while the payment for SGST accounts for 22,394 crores from IGST as a part of the regular settlement. Therefore, the total of CGST and SGST after the settlement of IGST under the process accounted for 51,171 crores and 52,815 crores, respectively, both of them standing at a very high level.

On year on year basis, the GST collection rate has witnessed a spiked growth of 24 per cent compared to the level of 2020-21 and 36% in the year 2019-20. The same high rate of the collection has been appreciated by our Finance Minister Nirmala Sitharaman, who tweeted that this collection rate has been the second-highest ever since the tax regime started. It is evidence of how well our country’s economy has been doing, somewhat better than ever.

GST revenues have picked an incredible pace, with a spiked 24% year on year growth. According to the finance ministry reports, this rising growth is in trend with the nation’s economic recovery, which was very much needed. The rate of GST collections was hampered entirely during the last year when the whole country was under lockdown, and therefore there were no economic activities at all.

Therefore, the much-needed boost to the economy is provided by the rising customer demand. Moreover, the economic growth of the nation is reflected through the generation of e waybills. The increasing age of e way bills since the second wave of the COVID-19 virus is clear evidence of how great our country’s economic activities have been. unnamed

Moreover, the finance ministry reports also suggest that the rate of GST collection could have been higher if we did not disrupt the sale of the car and other products. But what affected their sales? The shortage of semiconductors. A sudden lack of semiconductors globally contributed to producing cars, mobile phones, and many other products. Therefore, if there were no shortage of those semiconductors, the sale would be more, and consequently, the rate of GST collections would be higher.

Moreover, the finance ministry also said that the trend had introduced a better public responsibility too, as the country has been witnessing a timely payment of taxes in the last few months compared to the previous months.

Along with this, the government has been making serious efforts to ensure higher compliance with the taxes. The government and the tax authorities at both the central and state level provide and ease the compliance by many ways such as SMS, enabling a quarterly return monthly payment system and auto-population of returns.

All of this is done so that people find the tax process easy, and we can avoid most of the tax evasion. October has been very significant for the whole country and its economy because the GST collection was very high, indicating the rise in economic activities and is much needed for our economy.

Article Proofread and Edited by Shreedatri Banerjee

Simerleen Kaur

Talk to me about economics, trade, and all things India.

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