Goods and Service Tax (GST) collections for October, the beginning of a demand-boosting festive season, came in at Rs 1.30 lakh crore, compared with Rs 1.17 lakh crore in September, indicating strengthening economic recovery in the second half of the fiscal year 2021-22.
October GST collections were not only the second highest for the fiscal year, but the second highest monthly collections since the introduction of the nationwide tax in 2017. The highest ever was also this year, at Rs Rs 1.41 lakh crore in April.
The October GST print takes total gross GST collection for the year to Rs 8.12 lakh crore. All but one month in the current fiscal year (June, Rs 92,849 crore) have been comfortably above the Rs 1 lakh crore mark.
"This is very much in line with the trend in economic recovery. This is also evident from the trend in the e-way bills generated every month since the second wave," the Finance Ministry said in a statement.
"The revenues would have still been higher if the sales of cars and other products had not been affected on account of disruption in supply of semi-conductors," it said.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
Out of the monthly gross collections, Central GST in October stood ati Rs 23,861 crore, State GST at Rs 30,421 crore, Integrated GST at Rs 67,361 crore and cess collected at Rs 8,484 crore.
As reported earlier, the government is confident that net tax revenues for the year (direct plus indirect tax) will comfortably cross the budgeted target of Rs 15.45 lakh crore. However, as budget preparations begin, higher expenditure also remains a concern.
Festive season sparks
"The six-month high GST collections of October 2021 are a reflection of the healthy pickup in GST e-way bills in September 2021, led by pre-festive season stocking, as well as improved compliance," said Aditi Nayar, Chief Economist with Icra Ltd.
The GST revenues for the month of October were 24 percent higher than the same period last year and 36 percent over the pre-pandemic level of 2019-20.
"The impressive GST collections have resulted from a combination of sustained economic growth and continuing policy initiatives to improve compliance and discourage evasion," said MS Mani, Senior Director, Deloitte India.
"If the robust GST collections seen in the current fiscal continue on the back of a sustained growth of the economy, it would be likely that the GST collection targets for the year would be exceeded. This would provide some fiscal space to absorb the increased healthcare costs etc," Mani said.Icra's Nayar said that GST collections for November 2021 could be in the range of Rs 1.25-1.35 lakh crore in November 2021 and that the target for the year could be exceeded by Rs 50,000 crore.