After a brief downturn in June due to the Covid-19 second wave, Goods and Service Tax (GST) collections for the month of July 2021 rose to Rs 1.16 lakh crore, triggering hopes of a recovering economy even as the country passes through the weak end of the second COVID wave.
“With the easing out 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,” Finance Minister Nirmala Sitharaman said on Twitter.
Finance Ministry data released on July 1 showed GST was again on the uptick after falling below the Rs 1 lakh crore mark to Rs 92,849 crore in the previous month. Economists hailed the new figures as indicative of a growing resilience in the economy.
"The sharp increase in the collections indicate the resumption of economic activities and will raise expectations of better collections in the coming months," M.S Mani, Senior Director, Deloitte India said.
"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 the economic activities have resumed across the country," he added.
In June, GST collections had fallen for the the first time in nine months below the Rs 1 lakh crore mark. Going forward, officials say that even in case of a third wave, economic activity is not expected to be severely hit as centre and states have learnt to handle localized lockdowns and containment zones better.
"Collections in July has seen a sharp uptick as compared to June on the back of economic revival due to unlocking of businesses in June. If the country is able to resist the third wave, the GST collections should increase from hereon." Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co said.
Out of the Rs 1.16 lakh crore garnered in July, central GST was Rs 22,197 crore, State GST was Rs 28,541 crore, Integrated GST was Rs 57,864 crore and cess was Rs7,790 crore, the Finance Ministry said in its statement.
"The total revenue of centre and the States after regular settlement in the month of July is Rs 50,284 crore for central GST and Rs 52,641 crore for state GST," it said.