View from India: GST collection surges ahead

For the first time, the gross collection of GST has crossed ₹1.75 lakh crore mark (1.75tn rupees, £17bn), to reach ₹1,87,035 crore. This is ₹19,495 crore above the April 2022 figure of ₹1,67,540 crore.

The total number of e-waybills (electronic bills) generated in the month of March 2023 was 9.0 crore [1 crore = 10 million], which is 11 per cent higher than 8.1 crore e-way bills generated in February 2023.

GST is of three types i.e. CGST or Central Goods and Services Tax, SGST or State Goods and Services Tax and IGST or Integrated Goods and Services Tax.

Of the latest figure, CGST is ₹38,440 crore. CGST is levied by the central government for intrastate movement of goods and services. SGST stood at ₹47,412 crore. SGST means intrastate supplies of goods and services by the state government where the product sold is consumed and is taxable. IGST is ₹89,158 crore (including ₹34,972 crore collected on import of goods). IGST is for interstate purchases or supplies of taxable services and goods and imports of services and goods. Cess stood at ₹12,025 crore (including ₹901 crore collected on import of goods).

“Rising tax collection despite lower tax rates shows the success of how GST has increased integration and compliance," prime minister Narendra Modi said in a recent social media post. 

The rollout of the indirect tax regime GST took place in July 2017. Touted as India’s biggest tax reform, GST has replaced about 20 federal and state levies. It is a unifier wherein the nation has a similar tax structure throughout. To that effect, it is historic in nature. Modi has described GST as “One Nation, One Tax.” The GST Council, headed by Union Finance Minister Nirmala Sitharaman, is the governing and key decision-making body for GST.

Now, let’s try to figure out how the GST collection has surged. A couple of thoughts come to mind. Since our focus is on technology, let me begin with the tech input. The GST ecosystem is automated and all transactions are online. Tech tools, along with data analytics and artificial intelligence shed light on pending tax and tax evasion. Transactions and goods movement can be monitored. There is visibility, traceability and accountability. In fact all proceedings pertaining to GST can be tracked. And this probably includes electronic compliances, generation of e-invoices and e-way bills. A tech-enabled tax system could mean better compliance. Simply put, tax filing happens on time.

Another thing is that the government has mandated that business-to-business (B2B) transactions for enterprises with an annual turnover of over ₹20 crore have to compulsorily generate e-invoices. Online invoices may suggest that the goods consignment moves smoothly and efficiently. Logistics movement is also less cumbersome. This can be attributed to the fact that the government has eliminated multiple checkpoints and permits at state border check points. Other encouraging factors include a strong pick-up in consumer demand as well as a move towards economic recovery.

GST could be summed up as a single national unified market for businesses. Probably such tax collections could bolster India’s goal of achieving a five-trillion-dollar economy in the coming years. As reported by the media, Modi has hailed the record GST revenue receipts as great news for the Indian economy.

Though GST collection has touched an all-time high in April, the government has just announced a two-month special drive to identify fake GST registration and track offenders. This initiative comes in the wake of the fact that GST evasion was over ₹1 lakh crore in 2022-23. Data analytics and artificial intelligence tools have been leveraged to track tax evaders and fake registrations.