GST collections have crossed ₹1 lakh crore in eleven of the last 12 months, with the government attributing the trend to a rapid economic recovery and improved compliance levels, but economists are unable to analyse these tax numbers as critical data points are no longer shared by the government.
Until December 2020, when monthly GST collections were released, the official statement from the Finance Ministry usually included details of the number of GSTR 3B returns filed by taxpayers and a State-wise break-up of revenues.
State-wise revenue trends have been shared for only four of the eight months since then — February, March, July and August. The last month for which the government shared the number of GSTR 3B returns filed was January. The GSTR 3B return is the summary of a firm’s GST liabilities for each month.
“With the current details available for GST, there cannot be any kind of analysis except to say the revenues went up or down,” said a professor at a major Delhi-based economic research institute. GST now accounts for 65% of States’ own tax revenue, he pointed out.
The chief economist at a major rating agency said it is difficult to tell how much of the healthy GST kitty can be ascribed to better compliance and how much to rising economic activity.
“While incremental economic activity is part of the story, continuous improvements in compliance levels are a major factor according to the government itself. Ideally, we should have the information on compliance so as to assess trends better,” he said, adding that State-wise numbers are also helpful especially amid varying pandemic restrictions.
Kerala Finance Minister K.N. Balagopal said the lack of transparency around GST data was a concern for States. “Transparency is critical even for States to know the situation on the ground. If a transparent attitude is not there from the Centre, States will lose not only their rights, but they could lose financially as well if they are not able to check the situation,” he said.
In January, when GST collections hit a record high of ₹1.2 lakh crore, the total GSTR-3B returns filed were 90 lakh as per the Ministry. But that number hasn’t been released ever since, including when GST revenues touched a fresh peak of over ₹1.41 lakh crore in April.
“After the sharp uptick in January, the government has stopped disclosing compliance levels, but the Finance Minister’s statement talks about a 40%+ increase in the GST tax base to 12.8 million since then,” JM Financial analysts Aishwarya Sonker, Dhananjay Sinha and Arshad Perwez pointed out in an economics update on the GST collections for August released on Wednesday.
On July 1, when the GST regime completed four years, Finance Minister Nirmala Sitharaman expressed confidence that higher GST collections would be the new normal owing to better tax compliance. The tax base, she said, had almost doubled from 6.6 million to 12.8 million in four years.