The government mopped up its highest ever monthly Goods and Services Tax collection last month due to seasonal strength in March industrial activity and not because of the quarterly payments from the composition scheme.
That’s the word from financial major Credit Suisse. GST collection in the month of April crossed the Rs 1 lakh crore mark for the first time since the new tax regime was rolled out on July 1 last year, the finance ministry said in a statement. That can be attributed to the the seasonal strength in industrial output in March, Neelkanth Mishra and Prateek Singh of Credit Suisse said in a report.
March industrial production is typically 12 percent higher than the July-February average. If industrial activity for the rest of the year rose at the same pace as March, adjusted average monthly GST revenue would have been about Rs 92,200 crore instead of the current average of Rs 89,900 crore, they added.
This rise does not reflect a pickup in tax buoyancy, according to Japanese brokerage Nomura. “If the year-end spike in seasonality is taken into account, the numbers do not appear blockbuster,” it said in a research note.
Historically the government’s indirect tax collections have always nearly doubled in March, Nomura said. And when compared to the monthly average, collections in April have risen only about 15 percent, it added.