Topic: GS3 – Indian economy.
- In October, India’s gross Goods and Services Tax (GST) revenues experienced a strong rebound, with a 10-month high growth rate of 13.4%.
- This growth resulted in the second-highest monthly GST collection of ₹1.72 lakh crore.
- The October GST receipts were 5.7% higher than the previous month (September), which had seen a slowdown in growth to a 27-month low of 10.2%.
Reasons for better GST performance in recent time:
- Economic Recovery: Improved economic conditions and recovery from the impact of the COVID-19 pandemic have led to increased consumption and economic activity, contributing to higher GST collections.
- Anti-Evasion Measures: Enhanced anti-evasion measures, such as stricter enforcement and digital tracking of transactions, have helped curb tax evasion and boost GST revenue.
- Compliance Improvements: Greater compliance by businesses and taxpayers has led to more accurate reporting and timely payment of GST dues.
- Increased Imports: Growth in imports of goods has contributed to higher GST collections, especially the levies on imported goods.
- GST Compensation Cess: Record-high GST Compensation Cess collections, including those from goods imports, have added to the overall GST revenue.
- Fiscal Discipline: A focus on fiscal discipline and efficient tax administration has played a role in improving GST performance.
- Policy Reforms: Ongoing policy reforms and adjustments in GST rates and regulations have also influenced revenue growth.