3 reasons why GST collections hit record high of Rs 1.15 lakh crore
GST collections in December 2020 showed an unexpected year-on-year growth of 11.6 per cent to Rs 1.15 lakh crore, the highest monthly GST collection so far
- Jan 1, 2021,
- Updated Jan 8, 2021 2:35 PM IST
The New Year started with a bang for the government as far as its finances are concerned. GST collections in December 2020 showed an unexpected year-on-year growth of 11.6 per cent to Rs 1.15 lakh crore, the highest monthly GST collection so far.
So, what could be the reasons for such jump in collection in December? We talked to number of experts to explain why GST collections in December 2020 showed unexpected jump. Here are some of the reasons:
Some experts also attribute this growth to the heightened vigilance by revenue department against evasion. The government has been going after non-filers and fake billers with a vengeance for past few months.
In October and November 2020, 1.63 lakh registrations were cancelled due to non-filing of GSTR-3B returns for more than six months. Besides, Directorate General of GST Intelligence (DGGI) and CGST Commissionerates arrested 164 fraudsters, including five chartered accountants and a woman in a nationwide drive over a month. They also filed 1,768 cases against 5,745 GSTIN entities.
Pratik Jain, Partner and Leader Indirect Tax, PwC India, says that the reason for this growth could be tightening of compliances with measures such as e-invoicing and increased investigations to catch tax evaders even though GST audits for 2017-18 and 2018-19 are yet to start in a big way. "Steady increase in number of GST returns (GSTR 3B) filed is encouraging, which is 87 lakh in December 2020 against around 81 lakh in December 2019," says Jain of PwC.
Rajat Bose of Shardul Amarchand Mangaldas says that the government should provide a breakup of the GST collected through filing of returns and GST collected through recovery drives initiated by the Department of Revenue Intelligence and DGGSTI authorities, which would give us a better picture of the extent of economic recovery.
He says that these recovery drives alone could have resulted in Rs 10,000-15,000 crore additional collection in December.
Also Read: December GST collections highest ever at Rs 1.15 lakh crore
Also Read: Yamaha sells 39,224 units in December, sales rise 33%
The New Year started with a bang for the government as far as its finances are concerned. GST collections in December 2020 showed an unexpected year-on-year growth of 11.6 per cent to Rs 1.15 lakh crore, the highest monthly GST collection so far.
So, what could be the reasons for such jump in collection in December? We talked to number of experts to explain why GST collections in December 2020 showed unexpected jump. Here are some of the reasons:
Some experts also attribute this growth to the heightened vigilance by revenue department against evasion. The government has been going after non-filers and fake billers with a vengeance for past few months.
In October and November 2020, 1.63 lakh registrations were cancelled due to non-filing of GSTR-3B returns for more than six months. Besides, Directorate General of GST Intelligence (DGGI) and CGST Commissionerates arrested 164 fraudsters, including five chartered accountants and a woman in a nationwide drive over a month. They also filed 1,768 cases against 5,745 GSTIN entities.
Pratik Jain, Partner and Leader Indirect Tax, PwC India, says that the reason for this growth could be tightening of compliances with measures such as e-invoicing and increased investigations to catch tax evaders even though GST audits for 2017-18 and 2018-19 are yet to start in a big way. "Steady increase in number of GST returns (GSTR 3B) filed is encouraging, which is 87 lakh in December 2020 against around 81 lakh in December 2019," says Jain of PwC.
Rajat Bose of Shardul Amarchand Mangaldas says that the government should provide a breakup of the GST collected through filing of returns and GST collected through recovery drives initiated by the Department of Revenue Intelligence and DGGSTI authorities, which would give us a better picture of the extent of economic recovery.
He says that these recovery drives alone could have resulted in Rs 10,000-15,000 crore additional collection in December.
Also Read: December GST collections highest ever at Rs 1.15 lakh crore
Also Read: Yamaha sells 39,224 units in December, sales rise 33%