The Goods and Services Tax (GST) revenue in February increased by 12% year on year to over 1.49 lakh crore, the fourth highest collection ever, but fell short of the 1.5-lakh crore target by 423 crore due to February being a shorter 28-day month.
According to experts, the 1,49,577 lakh crore revenue in February reflected the Indian economy’s resilience in the face of strong global headwinds from the Ukraine war and demand contractions in major economies.
“Normally, because February is a 28-day month, revenue collection is relatively lower,” the Union finance ministry said in a statement.
For the past 12 months, the monthly GST revenue collection, a barometer of economic health, has been greater than 1.40 lakh crore.
However, according to GDP figures released by the National Statistical Office (NSO) on Tuesday, the Indian economy grew at a slower-than-expected 4.4% in the third quarter (October-December 2022) of the current fiscal year due to a contraction in manufacturing and lower consumption growth.
According to data from the finance ministry, February saw the highest cess collection of Rs 11,931 crore since the implementation of GST, indicating increased consumption of luxury goods.
When the GST regime was launched, the law guaranteed states a 14% increase in annual revenue for the five-year transition period from July 1, 2017, to June 30, 2022, and also guaranteed that any revenue shortfall, if any, would be made up through a compensation cess levied on luxury goods and sin products such as liquor, cigarettes, other tobacco products, aerated water, automobiles, and coal.
While states will have no claim to compensation after July 1, 2022, the cess will be collected until March 31, 2026, to service the back-to-back loans are taken out by states when compensation cess collection fell in 2020 and 2021 due to the Covid-19 pandemic.
According to official data, the Central GST (CGST) component of the gross GST revenue collected in February – reflecting actual transactions conducted in January – was 27,662 crore, State GST (SGST) was 34,915 crore, Integrated GST (IGST) was 75,069 crore (including 35,689 crores collected on import of goods), and cess was 11,931 crore (including 792 crores collected on import of goods).
According to the government, it has settled 34,770 crores to CGST and 29,054 crores to SGST as a regular settlement from IGST.
