Daily News Analysis

GST mop-up rises 7.4% in Feb; tops Rs 1 lakh crore for 5th straight month  

2nd March, 2021 Economy

Context:

  • Goods and services tax (GST) collections in February (for sales in January) rose 4 per cent year-on-year to Rs 1,13,147 crore.

 

Details:

  • Though lower than Rs 1,19,875 crore collected the previous month, the February mop-up is the fifth consecutive month of GST collections breaching the Rs 1-lakh-crore mark, in a sign of pickup in economic activity along with compliance measures and action against tax evaders making use of data analytics by the GST authorities.
  • The Finance Ministry said the GST revenues crossed Rs 1.1 lakh crore for the third time in a row post-pandemic. This is a clear indication of the economic recovery and the impact of various measures taken by tax administration to improve compliance.
  • GST collections had plummeted to a record low of Rs 32,172 crore in April, following the lockdown in the wake of Covid-19.
  • The Centre did not provide the number of GSTR-3B summary returns filed in February, which had stood at 90 lakh in January. Also, there is no breakup for the revenue accruing from economic activity and anti-evasion

 

Goods and Services Tax:

  • The goods and services tax (GST) is a tax on goods and services sold domestically for consumption.
  • The tax is included in the final price and paid by consumers at point of sale and passed to the government by the seller.
  • Goods and services are divided into five different tax slabs for collection of tax - 0%, 5%, 12%, 18% and 28%.
  • However, petroleum products, alcoholic drinks, and electricity are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax system.
  • There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold.
  • In addition a cess of 22% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products. Pre-GST, the statutory tax rate for most goods was about 26.5%, Post-GST, most goods are expected to be in the 18% tax range.
  • The tax came into effect from 1 July 2017 through the implementation of the One Hundred and First Amendment of the Constitution of India by the Indian government. The GST replaced existing multiple taxes levied by the central and state governments.

 

https://indianexpress.com/article/business/gst-mop-up-rises-7-4-in-feb-tops-rs-1-lakh-crore-for-5th-straight-month-7210274/