GST revenues cross 1.3 lakh cr. in Feb.
- The Gross Goods and Services Tax (GST) revenue in February was 26% higher than pre-pandemic levels at ₹1,33,026 crore, the Finance Ministry said.
- The collections are 18% higher than February 2021 and mark the fifth time that GST revenues have crossed ₹1.30 lakh crore since its launch in July 2017.
- Revenues from import of goods were 38% higher year-on-year, while revenues from domestic transactions (including import of services) were 12% higher than the revenues from these sources during February 2021.
- GST Compensation Cess collections crossed ₹10,000 crore in a month for the first time in February, which the Finance Ministry said 'signifies recovery of certain key sectors, especially, automobile sales'.
- Seeking to emphasize the significance of these collections, the Ministry pointed out that ‘being a 28-day month, February normally witnesses revenues lower than that in January’.
- This high growth should also be seen in the context of partial lockdowns, weekend and night curfews and various restrictions that were put in place by various States due to the Omicron wave, which peaked around 20th January.
- GST collections exceeded ₹1.33 lakh crore despite the challenging pandemic situation in January suggesting revenues were now on a stable trajectory and the 2021-22 targets would be exceeded.
- Disparities between the collection trends among the States is a concern.
- While on an overall basis, the collections are 18% higher than the same period last year, there is significant divergence amongst States, with increases in the range of 2% to 23% amongst the large States.
- Among the major industrial States, Maharashtra and Karnataka recorded a 21% increase in GST revenues in February, while the growth rate was far lower at 5% for Tamil Nadu and 8% for Gujarat.
- Odisha clocked 23% growth in GST revenues, while Telangana and Andhra Pradesh witnessed a growth of 13% and 19%, respectively.
- Uttar Pradesh, where Assembly elections are underway, recorded a 9% uptick in revenues, while Punjab recorded 14% growth. West Bengal and Madhya Pradesh GST revenues grew by a mere 2%.
Main Features of GST
- Applicable On supply side: GST is applicable on ‘supply’ of goods or services as against the old concept on the manufacture of goods or on sale of goods or on provision of services.
- Destination based Taxation: GST is based on the principle of destination-based consumption taxation as against the present principle of origin-based taxation.
- Dual GST: The GST to be levied by the Center is called Central GST (CGST) and that to be levied by the States is called State GST (SGST).
- Import of goods or services would be treated as inter-state supplies and would be subject to Integrated Goods & Services Tax (IGST) in addition to the applicable customs duties.
- GST rates to be mutually decided: CGST, SGST & IGST are levied at rates to be mutually agreed upon by the Center and the States. The rates are notified on the recommendation of the GST Council.
- Multiple Rates: Initially GST was levied at four rates viz. 5%, 12%, 16% and 28%. The schedule or list of items that would fall under these multiple slabs are worked out by the GST council.
The GST Council
- It is a constitutional body (Article 279A) for making recommendations to the Union and State Government on issues related to GST.
- The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in charge of Finance or Taxation of all the States.
- It is considered as a federal body where both the center and the states get due representation.