Economy

Published: Apr 5, 2023
Updated: Apr 5, 2023

Robust GST Collections Reflect Strong Indian Economy

Despite global headwinds , tax collections reflect resilient global economy

The Indian government has released data revealing that the Goods and Services Tax (GST) collection for March has been buoyant for 12 consecutive months. Despite global headwinds, the sustained buoyancy of the tax on consumption highlights the resilience of the Indian economy. The total gross collection for 2022-23 stands at over ₹18 lakh crore, a 22% year-on-year jump.

GST Collections in 2017-18 and 2018-19:

The GST was launched on July 1, 2017, and in 2017-18, the highest monthly collection was ₹95,600-odd crore. Next year (2018-19), ₹1 lakh crore monthly collection crossed only four times.

GST Collections in 2019-20 and April 2020:

In 2019-20, the collection reached a new high as the tax collection was above ₹1 lakh crore seven times. However, the Covid-19 pandemic hit in April 2020, resulting in the lowest-ever collection of ₹32,172 crore.

PM Modi's Emergency Measures:

To combat the pandemic's impact, Prime Minister Narendra Modi's emergency measures provided free food and fuel to the poor, direct cash transfer to the vulnerable, and free vaccines to all citizens. Finance Minister Nirmala Sitharaman provided stimulus to the economy in a calibrated manner, focusing on productive credit facilities without collaterals, providing a lifeline to firms, particularly micro, small and medium enterprises (MSMEs).

GST Collections in 2020-21:

The result was quick and visible when GST collections in October 2020 bounced back to the psychological level of ₹1 lakh crore. The level was not just regained, but also sustained - for six consecutive months till the financial year-end on March 31, 2021.

GST Collections in 2021-22:

Business activities recovered rapidly in the next financial year (2021-22), which was evident from stronger monthly GST collections. Barring May and June 2021, GST revenues were robust every month, closing March 2022 at over ₹1.42 lakh crore, a record till date.

GST Collections in 2022-23:

The FY23 was exceptionally good, starting with an all-time high at ₹1.67 lakh crore in the month of April 2022 and ending with the second-highest ever at ₹1.60 lakh crore in March 2023. According to the latest official statement, the total gross collection for 2022-23 stood at over ₹18 lakh crore, a 22% year-on-year jump, and the average gross monthly collection for the full year was ₹1.51 lakh crore.

GST Maturity and Economic Health:

The progressive growth in GST collection since its inception on July 1, 2017, proves that the new indirect tax regime has matured. This is an answer to the naysayers that such a vast reform, which unified the entire domestic market, requires patience. GST is a tax on consumption, therefore, it is one of the high-frequency indicators of economic health. While advanced economies are slowing down, India is still one of the fastest-growing major economies.The sustained buoyancy of the tax on consumption and the progressive growth in GST collection prove the maturity of the new indirect tax regime. The government's emergency measures and Finance Minister Nirmala Sitharaman's focus on productive credit facilities without collaterals provided a lifeline to firms, particularly micro, small and medium enterprises (MSMEs).