The collections, based on transactions in Dec, are the second highest since the introduction of the GST in July 2017 and only the third time that the kitty has gone past the Rs 1.7 lakh crore mark. The numbers are expected to be higher as full data is yet to come in with collections up to 5 PM recorded so far, the ministry said.
GST collections have stayed strong and the revised estimates for the current financial year, which is due to be presented by finance minister Nirmala Sitharaman on Thursday, are expected to see an upward revision.
“The GST collections are in line with the other macroeconomic parameters, which indicate a significant uplift in economic activities, with even the IMF upgrading the growth forecast to 6.7% for FY 2023-24. The same collection trajectory in the next two months will ensure that the tax collection targets for the year are comfortably surpassed,” said MS Mani, partner at Deloitte.
A part of the jump in collections in January may be on account of completion of audits and investigations related to earlier years, said analysts.
“This consistent upward trend, evident in surpassing key milestones, reflects the effectiveness of improved tax administration and heightened taxpayer compliance. Overall, these positive indicators pave the way for continued economic expansion,” said Saurabh Agarwal, tax partner at consulting firm EY.
Tax experts expect the Centre and the states to undertake the next round of reforms after the general election, which could result in rationalisation of rates and reworking of slabs.
“… over past seven years or so of the GST regime, the CAGR of collections has been at around 12%. As taxpayers’ base has also doubled and keeps increasing by the day, these are clear indications that the biggest tax reform in Indian history has stabilised to a large extent,” said Vivek Jalan, a partner consulting firm Tax Connect Advisory.