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India’s GST revenues saw a robust growth of 12.54% in February, exceeding ₹1.68 lakh crore.
This marked the fourth-highest monthly collection since GST’s inception.

Why discuss this?

The Goods and Services Tax (GST) system in India has been a pivotal component of the country’s tax structure since its implementation in July 2017.
Analyzing the trends and performance of GST revenues offers insights into the economic health and growth trajectory of the nation.

Yearly Comparison: The fiscal year 2023-24 witnessed a noteworthy increase, reaching ₹18.4 lakh crore, indicating an 11.7% rise from the previous year.
Yearly Uptick: This year’s growth stands as the third highest since the implementation of GST.
Domestic Transactions: Revenues from domestic transactions surged by 13.9%.
Imported Goods: Revenue from goods imports also saw a notable increase, rising by 8.5%.

Overall Collection Analysis: After accounting for refunds, February’s GST collection amounted to ₹1.51 lakh crore, indicating a substantial 13.6% growth from the previous year.
State Variability: States exhibited diverse performances, with some experiencing declines while others exceeded national growth averages.
Declining Revenues: Five states witnessed contractions, with Mizoram and Manipur showing significant decreases.
Outperforming States: Twelve states, including Jammu and Kashmir, Assam, and Maharashtra, surpassed the national average growth rate.

Components of GST Intake: February’s gross GST intake included CGST, SGST, and IGST, amounting to ₹84,098 crore.
Cess Collections: Compensation cess collections amounted to ₹12,839 crore, with additional revenue from imported goods.
Revenue Distribution: The Central government allocated substantial sums to CGST and SGST from IGST collections.
Revenue Allocation: After regular distributions, CGST received ₹73,641 crore, while SGST received ₹75,569 crore.

Definition: GST is an indirect tax that has replaced many indirect taxes in India such as excise duty, VAT, services tax, etc.
Legislation: The GST Act was passed in Parliament on 29th March 2017 and came into effect on 1st July 2017. It is a single domestic indirect tax law for the entire country.
Tax Structure: It is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
Taxation Points: Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Maharashtra).
SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Maharashtra).
IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu).

GST has mainly removed the cascading effect on the sale of goods and services.
Removal of the cascading effect has impacted the cost of goods.
Since the GST regime eliminates the tax on tax, the cost of goods decreases.
Also, GST is mainly technologically driven.
All the activities like registration, return filing, application for refund and response to notice needs to be done online on the GST portal, which accelerates the processes.

High operational cost.
GST has given rise to complexity for many business owners across the nation.
GST has received criticism for being called a ‘Disability Tax’ as it now taxes articles such as braille paper, wheelchairs, hearing aid etc.
Fuels are not under GST, which goes against the ideals of the unification of commodities.

Q. All revenues received by the Union. Government by way of taxes and other receipts for the conduct of Government business are credited to the:

(a) Contingency Fund of India

(b) Public Account

(d) Deposits and Advances Fund

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