Thursday, 10 Oct, 2024
By: Yash Gupte
The month of April 2023 saw the highest ever tax collection on a single day on April 20, 2023 as Rs 68,228 crore was paid through 9. 8 lakh transactions. Image Source: IANS
The revenue for April 2023 after regular settlement was Rs 84,304 crore which was 12 percent more than the GST collection for the same month last year
The monthly Goods and Service Tax (GST) revenues have exceeded the mark of Rs. 1.8 lakh crore in the month of April 2023 for the first time in history, the Finance Ministry said in a press release. The gross GST revenue collected in the month of April 2023 was Rs 1,87,035 crore of which Central Goods and Service Tax (CGST) was Rs 38,440 crore, State Goods and Service Tax (SGST) was Rs 47,412 crore, Integrated Goods and Service Tax (IGST) was Rs 89,158 crore. (Including Rs 34,972 crore collected on import of goods) and cess is Rs 12,025 crore (including Rs 901 crore collected on import of goods). It was for the first time that the gross GST collection crossed Rs 1.8 lakh crore mark registering the highest ever collection since implementation of GST. The month of April witnessed the highest IGST collection ever.
The revenue for April 2023 after regular settlement was Rs 84,304 crore which was 12 percent more than the GST collection for the same month last year. During the month, revenues from import of goods was 16 percent higher and the revenues from domestic transaction (including import of services) are 14 percent higher than the revenues from these sources during the same month last year. The total gross collection in the financial year 2022-23 stands at Rs 18.10 lakh crore and the average gross monthly collection for the full year is Rs 1.51 lakh crore. FY 2022–2023 saw a 22 percent increase in gross GST revenues over the previous year. In comparison to the first, second, and third quarters, the average monthly collections of Rs 1.51 lakh, Rs 1.46 lakh, and Rs 1.49 lakh crore respectively, the average monthly gross GST collection for the last quarter of the FY 2022–23 was Rs 1.55 lakh crore.
The GST is a value-added tax applied on the majority of goods and services sold for domestic consumption. Consumers pay the GST, but businesses that provide products and services remit it to the government. GST is levied on the 'supply' of goods or services, as opposed to the prior concept of levy on the manufacture of things, the sale of goods, or the provision of services. The rates of CGST, SGST, and IGST are mutually agreed upon by the Centre and the States. The rates are announced based on the GST Council's suggestion. In May 2015, the GST (122nd Constitutional Amendment) Bill, 2014 was enacted. It was enacted as the Constitution (101st Amendment) Act, 2016, and went into force on September 16, 2016. The GST was implemented on July 1, 2017.
Also, the month of April 2023 saw the highest ever tax collection on a single day on April 20, 2023 as Rs 68,228 crore was paid through 9. 8 lakh transactions. The highest single day payment last year (on the same date) was Rs 57,846 crore through 9.6 lakh transactions.
Source: Ministry of Finance
The FY2023-24 has begun on a sweet note as the first month of the FY2023-24 recorded the highest ever GST collection at Rs 1,87,035 crore. The GST revenue collection was lowest in June 2021 at Rs. 92,800 crore and the highest was recorded in the month of April in 2022 at Rs. 1,67,540 crore. The GST collection had decreased by around Rs. 27,000 crore in May 2022 as the GST revenue collection stood at Rs. 1,40,885 crore. It witnessed a gradual recovery in the months of June and July 2022 but again decreased by around Rs. 5000 crore to Rs. 1,43,612 crore in August 2022. The monthly GST collection crossed the mark of Rs 1.5 lakh crore in October 2022 and then in January 2023 when the GST collection was recorded at Rs 1,57,554 crore. Prior to this, the highest ever GST collection was recorded in April 2022 at Rs 1,67,540 crore.
More than 91 percent of GST-registered businesses had filed returns and paid taxes in March, indicating increased compliance and an increase in economic activity. Abhishek Jain, Partner, Indirect Tax at KPMG in India said the monthly and yearly GST collection point towards the growing trajectory of the Indian economy. He added, “Another cheer point is the highest ever compliance rate with 91.4 per cent of returns being filed in the month of March, indicating success of revenue authorities and businesses in ensuring tax compliance and preventing tax evasion."
Apart from registering the highest ever GST collection in a financial year, the FY2022-23 made another record as it recorded the highest tax buoyancy in 15 years. According to the time series data provided by the Central Board of Direct Taxes (CBDT), direct tax buoyancy, a measure of growth in the collection of personal income tax and corporation tax versus the growth in GDP rose to 2.52 in FY22, the highest level in the previous 15 years. A higher buoyancy indicates more effective tax collection. The highest buoyancy of 2.59 was observed in FY03, while it became negative (-1.21) in FY20. The CBDT highlighted the data for 22 years beginning in 2000–21. Tax buoyancy was not calculated for FY21 because both GDP and tax growth were negative. So buoyancy increased in FY22, most likely as a result of a low base effect.
In the ten years leading up to 2022–2023, gross direct tax receipts climbed by 173 percent, reaching approximately Rs 19.68 trillion. In the prior ten years, the growth rate was approximately 431.92 percent. From Rs 1.05 trillion in 2003–2004 to Rs 5.58 trillion in 2012–2013, direct tax revenue had increased by that point. The base, however, was small at the time. From 5.62 percent of GDP in 2013–14 to 5.97 percent in 2021–22, the direct tax share has risen. According to the data, the cost of collecting declined from 0.57 percent of the total collection in FY14 to 0.53 percent in FY22.
As per the Ministry, Net Direct Tax Collections have increased by 121.18 percent from Rs. 6,38,596 crore in FY2013-14 to Rs. 14,12,422 crore in FY2021-22. Talking about the Gross Direct Tax Collections, it increased by over 126.73 percent in FY2021-22 reaching a figure of Rs. 16,36,081 crore from Gross Direct Tax Collections of Rs. 7,21,604 crore in FY2013-14.
Source: Ministry of Finance
The gross personal income tax collection for FY 2022–23 is Rs. 9,60,764 crore, a 24.23 percent increase over the gross personal income tax collection of Rs. 7,73,389 crore for the year prior. In comparison to the refunds of Rs. 2,23,658 crore issued in FY 2021–2022, refunds of Rs. 3,07,352 crore were issued in FY 2022–2023—a rise of 37.42%. The government has projected a 10.5 percent growth in revenues from corporate and individual income tax to Rs 18.23 lakh crore in the current fiscal. Direct tax revenue, which includes income and corporate taxes, is anticipated to increase by more than 17 percent in FY23-24. Also, it must be noted that the FY22-23 has also witnessed record growth in gross corporate income tax (CIT) and gross personal income tax. This shows that in spite of tax cuts announced by the Finance Minister in the Union Budget 2023-24, there has been a significant growth in the collection of corporate income tax.
The central government’s direct tax collection has increased more than four times in last 12 years. The direct tax collection in the FY2010-11 was Rs 4,45,994 crore this increased to Rs 8,49,713 crore in FY2016-17 and now it has further increased to Rs 16,61,000 crore in FY2022-23. The direct tax collection for the FY2022-23 is record high till date.
One of the concerns is the prediction of a drop in direct tax collection in FY2023-24. The fiscal year 2022-23 has seen a record increase in net direct taxes, which are made up of personal income tax and the tax on corporate profits, exceeding the figures forecast in the Budget. Prior to the announcement of the Union Budget 2023–24 on February 1, 2023 a government source warned reporters that the predicted lower nominal GDP growth in 2023–24 on the basis of predictions of a worldwide recession could have an impact on income tax collection.
