the Impact of Digital Transformation

In April 2023, India's goods and services tax (GST) saw its highest-ever collection of Rs 1.87 lakh crore, surpassing the Rs 1.75 lakh crore mark for the first time. This was a significant increase from the consistent growth of 11-13% in previous months. Experts and industry players attribute the record-breaking indirect tax collections to several factors, including year-end compliances, overall economic growth, and a push for GST audits. Revenue authorities are also using data analysis and risky taxpayer identification to ensure tax recoveries. The Finance Minister has asked the Central Board of Indirect Taxes and Customs (CBIC) to introduce automated return scrutiny and intensify the fight against fake billing and input tax.

The robust growth of the Indian economy and the strong pick-up in consumer demand are evident from the highest-ever GST collection in April 2023, according to Mahesh Jaising, partner and leader (indirect tax) at Deloitte India. President of industry body ASSOCHAM, Ajay Singh, also sees the numbers as an excellent beginning of FY24, indicating the Indian economy's robust growth.

The Prime Minister, Narendra Modi, called the record collections "great news for the Indian economy" and said that the rising tax collection despite lower tax rates shows the success of how GST has increased integration and compliance. Gautam Mahanti, business head at IRIS Tax Tech, attributes the 12% growth in April 2023 to the rise in e-way bills generated in March 2023, which witnessed a 16% growth from the same period last year. He also believes that the record-breaking GST collection is a clear indication of the positive impact of e-invoicing and strengthened compliance regulations, coupled with India's thriving economy.

Although collections have maintained a healthy 11-13% growth in recent months, a normalizing base and some cooling of inflation may slightly moderate the pace of expansion in the coming quarter, according to Aditi Nayar, chief economist and head (research & outreach) at ICRA. However, it would still remain in the high single digits.

In terms of state-wise collections, Maharashtra had the highest GST collections with Rs 33,196 crore, followed by Karnataka (Rs 14,593 crore), Gujarat (Rs 11,721 crore), and Uttar Pradesh (Rs 10,320 crore). All states have shown an increase in collections, with the highest growth percentages year-on-year coming from the states in the northeast, J&K, and other states like Goa, Karnataka, and Maharashtra. However, Odisha and Gujarat's GST collection growth year-on-year at 3% and 4%, respectively, was unusual. Saloni Roy, partner at Deloitte India, believes that this will likely be made up in subsequent months.

Overall, the record-breaking GST collections in April 2023 are seen as a positive indicator of the growth of the Indian economy. The increase in GST collections is attributed to several factors, including year-end compliances by taxpayers, the overall growth of the economy, and the push for GST audits. Additionally, the revenue authorities have been using data analysis and risky taxpayer identification to recover tax.

The introduction of automated return scrutiny and intensified drives against fake billing and input tax is expected to further boost GST collections in the coming months. Experts and industry players believe that the buoyancy in GST collections will continue, and the robust growth of the Indian economy will persist.

The President of industry body ASSOCHAM, Ajay Singh, hailed the highest-ever GST collection of Rs 1.87 lakh crore in April 2023 as an excellent beginning of FY24. He stated that the GST numbers are indicative of the robust growth of the Indian economy, which is driven by a strong pick-up in consumer demand.

The Prime Minister of India, Narendra Modi, also expressed his delight at the record collections, calling it great news for the Indian economy. He added that the rising tax collection despite lower tax rates shows the success of how GST has increased integration and compliance.

Gautam Mahanti, business head at IRIS Tax Tech, highlighted that the growth in e-way bills in March 2023 contributed significantly to the GST collections in April 2023. He noted that the 12 per cent growth in April 2023 from the previous year is attributed to the rise in e-way bills generated in March 2023. The record-breaking GST collection in April 2023 is a clear indication of the positive impact of e-invoicing and strengthened compliance regulations, coupled with India's thriving economy.

Aditi Nayar, chief economist and head of research and outreach at ICRA, opined that while collections have maintained a healthy 11-13 per cent growth in recent months, a normalizing base and some cooling of inflation may moderate the pace of expansion slightly in the coming quarter. However, she also stated that it would still remain in the high single digits.

Looking at the state-wise GST collections, Maharashtra posted the highest GST collections with Rs 33,196 crore, followed by Karnataka (Rs 14,593 crore), Gujarat (Rs 11,721 crore), and Uttar Pradesh (Rs 10,320 crore). All states showed an increase in collections, with the highest growth percentages year-on-year coming in from the states in the northeast, J&K, and other states like Goa, Karnataka, and Maharashtra.

Saloni Roy, partner at Deloitte India, pointed out that Odisha and Gujarat's GST collection growth year-on-year at 3 per cent and 4 per cent, respectively, was unusual. However, she also mentioned that this would probably be made up in subsequent months.

In conclusion, the record-breaking GST collections in April 2023 indicate the robust growth of the Indian economy, driven by a strong pick-up in consumer demand. The buoyancy in GST collections is expected to continue, with the introduction of automated return scrutiny and intensified drives against fake billing and input tax. While some moderation in the pace of expansion is expected in the coming quarter, it would still remain in the high single digits. The rise in e-way bills generated in March 2023 and the positive impact of e-invoicing and strengthened compliance regulations are seen as major contributors to the record-breaking GST collection.