IGI Logo

GST collections down ~4% MoM in Aug’21…

…but still above INR1t mark

* Total gross goods & services tax (GST) collections contracted 3.8% MoM to INR1.12t in Aug’21. The government has now achieved 45.2% of its budgeted target (FY22BE), higher than 35% of FY21RE, collected during the corresponding months in the previous year. Yearly, GST collections grew 30% in Aug’21 on the low base of one of the lowest GST collections (since inception) in Aug’20 last year (due to the first COVID wave and subsequent lockdown phases).

* Within total GST in Aug’21, CGST collections amounted to INR205b, while SGST collections totaled INR266b. GST collections on imports / domestic activity expanded 40.2%/26.6% YoY to INR269b/INR851b in Aug’21.

* “With the easing out of COVID restrictions, GST collection for Jul-Aug’21 have again crossed INR1t, which clearly indicates that the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, especially action against fake billers, have also been contributing to the enhanced GST collections,” the finance ministry stated in its press release.

* Additionally, daily e-way bill generation in Aug’21 stood at 2.1m units (up to 30th Aug’21), similar to Jul’21 levels and far higher than the levels seen during the peak of the first and second COVID waves.

* After remaining above INR1t for eight months in a row, GST collections fell in Jun’21 – weighed by an unexpected second COVID wave – rising once again to over INR1t from Jul’21. Additionally, average GST collections for the first five months of FY22 (Apr–Aug’21) stood at INR1.13t, augmented by Apr’21 collections of INR1.4t. During May–Aug’21, average GST stood at INR1.06t, similar to the requirement of INR1.05t/month to achieve FY22BE. We believe the monthly average could come in at INR1.10–1.11t in FY22. If so, there could be excess collections of INR600–700b in FY22 on the GST front this year.

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer