Trend of GST Collection in India

Abstract

With effect from July 1, 2017 the Goods and Service Tax (GST) introduced in India replaces many indirect taxes that previously existed. GST has helped remove the cascading effect of various taxes.It is a big pace in the reform of indirect taxes which will play major role in growth and development of country. This paper gives understanding about GST, its benefits and trend of GST collection in India.

Introduction

I. INTRODUCTION

Tax is the major source of income to the government. ‘GST also known as the Goods and Services Tax is defined as the giant indirect tax structure designed to support and enhance the economic growth of a country’( Dani S 2016).GST is a comprehensive destination based single tax on the supply of goods and services from the manufacturer to consumer. ‘The fundamental aim of GST is to make uniform the scattered indirect tax system in India and avoid the cascading effect in taxation’ (Lala B 2017). It is an indirect tax which has replaced multiple taxes such as VAT, Central Sales Tax, Octroi, Service Tax etc. In India GST came effective from1 July 2017, with main tax slab rates of 0%,0.25%,3%, 5%, 12%, 18%, and 28%.The GST is the largest reform in India, paving the way for one market, one tax, one nation by merging several central and state taxes. ‘GST will improve the collection of taxes as well as boost the development of Indian economy by removing barriers between states and integrating the country through a uniform tax rate’ (Shettar M. 2018).

II. OBJECTIVES OF THE STUDY

Following are the objectives of the study:

1. To gain understanding of GST collection in India
2. To study the concept of GST.
3. To study the benefits of GST.

III. RESEARCH METHODOLOGY

The research methodology of this paper is exploratory in nature and it is based on secondary data. The data has been collected from various secondary sources like journals, newspapers, books and websites.

IV. LIMITATION OF THE STUDY

This is the limited study due to time and other constraints and it is based only on secondary data.

V. BENEFITS OF GST

‘GST introduction is a big step in the reform of indirect tax in India’(Rajasekaran R. and Pavithran P.). With the introduction of its, there are several benefits. Some of the benefits are as follows:

1. Elimination of cascading of taxes.
2. Simplified Tax System
3. Single and Transparent tax
4. Reduction in burden of taxes
5. Improvement in economic activity
6. Development of common national market
7. Uniform prices in country
8. Increase in employment opportunities
9. Increase in healthy competition
10. Increase in efficiency of revenue

VI. GST COLLECTION (RS IN CRORE)

The below table shows the trends of monthly gross GST revenue collection during the financial year 2020-21, 2021-2022 and 2022-23:

As per data released by Union Finance Ministry, the figure of GST collection in the year 2021-22 and in the of April and May of the current year 2022-23 has not only broken previous records but it also shows the future collection trends.The GST collection stands at Rs 1.67 lakh crore for the month of April 2022-23.Earlier in financial year April 2021 it was 1.39 lakh crore and in 2020 it was 32172 crore.The GST revenues during April 2022-23 are the highest while compare with other figures. April GST collections are almost 18 percent higher than previous record of Rs 1.42 lakh crore in March 2021-22 and 20 percent higher when compared to the year ago figure of Rs 1.39 lakh crore and current financial year figure of Rs 1.67.The consistent collections of over Rs 1 lakh crore for the last 12 months are showing positive sign of GST collection.

Trend of State-wise growth of GST Revenue during April 2022

The below table shows the trends of state wise gross GST revenue collection during the financial year 2020-21, 2021-2022 (in crore)

According to data released by Union Finance Ministry The most of the above states are showing positive growth except few, Maharashtra saw higher GST collection of Rs 27495crore, followed by Karnataka Rs 11820 crore, Gujrat Rs 11264 crore.In terms of growth percentage, Arunachal Pradesh saw the highest 90 percent growth in GST revenue as compared to April 2021.It was followed by Ladakh 53 percent, Andaman and Nicobar Islands 44 percent. Daman and Diu saw the highest -78 percent negative growth.GST revenue collections of Financial Year 2022 are almost 17 percent higher than previous Financial Year 2021.

The above data clearly shows the improvement in the compliance behaviour and an upward trend of revenue collection. It is the result of various measures taken by the government like anti-evasion activities, especially against fake billers, make compliance easier, smoother and strict, blocking of e-way bills for non filing of returns, system based suspension of registration of taxpayers who have failed to file six returns in a row and blocking of credit for return defaulters, nil filing through SMS, enabling quarterly return monthly payment (QRMP) system auto-population of return etc.

Conclusion

Goods and Service Tax is biggest indirect tax reform in the history of India. With One Nation One Tax in picture GST has helped remove the cascading effect of multiple taxes and brought the entire country under one tax regime. GST collections have been showing positive upward trend and that will play a big role in boosting Indian economy. It also shows improvement in the compliance behaviour which has been a result of various measures taken by government.

References

[1] Dani S. (2016). ‘A Research Paper on an Impact of Goods and Service Tax (GST) on Indian Economy’ Business and Economics Vol 7 Issue 4. [2] Shettar R. (2018). ‘Impact of Goods and Service Tax on the Indian Economy’ IOSR Journal of Business and Management, Vol 20 Issue 12. [3] Lala B. (2017). ‘Impact of GST on Indian Economy’ Internationl Journal of Recent Scientific Research, Vol 8 Issue 6 [4] Shinde M. (2019). ‘A Study of Impact and Challenges of GST on Various Constituents of Indian Economy’ International Journal of Research and Analytical Reviews, Vol 6 Issue 1. [5] Prakash N and Adithyaa A (2020). ‘A Study on GST Collection in India and its Analysis’ IJESC Vol 10 Issue 6 [6] www.businsess standard.com [7] www.economic times.com

Copyright

Copyright © 2022 Dr. Arvind Dubey, Dr. Manjari Dubey. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.