April 2024 GST Collection Hits Record High

GST collections surged to a record ₹2.10 lakh crore, representing a notable 12.4% year-on-year growth.

A portion of the increased collections can be attributed to the typical upswing in activity towards the end of the financial year.
Relentless focus on GST audits by both central and state GST authorities has compelled businesses to enhance their compliance efforts.
Strict penalties and enforcement actions against evaders have acted as deterrents.
Increased electoral expenses by political parties and a modest recovery in rural consumption

About Goods and Services Tax (GST)

GST is the Pan India single indirect tax based on the idea of “ONE NATION ONE TAX”.
It’s an outcome of merging major Central and State indirect taxes.
Destination-Based Taxation: It is a destination-based tax imposed on the consumption of goods and services nationwide, creating a unified common market for the country.
A destination-based tax is levied in the state where goods or services are consumed rather than where they are produced.
Implementation: Implemented from July 1, 2017, under the 101st Constitutional Amendment Act (Article 246A).

At the Central level, GST incorporated Central Excise Duty, Additional Excise Duty, Service Tax, Additional Customs Duty (Countervailing Duty), and Special Additional Duty of Customs.
At the State level, it incorporated State Value Added Tax/Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax, Luxury Tax, Taxes on lottery, betting, and gambling, etc

It operates as a dual GST system, with both the Centre and the States imposing taxes on a shared base.
The Centre’s tax is called Central GST (CGST), while the State’s tax is called State GST (SGST).

Imported goods or services are treated as interstate supplies and are subject to Integrated Goods & Services Tax (IGST) along with applicable customs duties.

GST is implemented at four rates: 5%, 12%, 18%, and 28%, with the specific items falling under each slab determined by the GST council.
CGST, SGST, and IGST rates are agreed upon jointly by the Centre and the States, as recommended by the GST Council.

The tax base has expanded to cover a wider range of goods and services, resulting in increased tax collection.
It facilitated the creation of a unified market across India, reducing compliance costs.
It has enhanced manufacturing and distribution efficiency by eliminating tax cascading.
It has also reduced litigation, allowing entrepreneurs to focus more on their businesses.
It reduces administration costs, enhances transparency, and improves overall efficiency.
Taxes on imported goods have been reduced by 5-10%.

States object to the imposition of additional cess and surcharge, as the Centre retains exclusive authority over the cess and surcharge tax pool.
SGST and CGST input credits cannot be interchanged. Any input credit balance of CGST, after setting off tax liability towards CGST, cannot be used to set off against SGST.
Manufacturing states face considerable revenue losses, leading to concerns regarding compensation for these losses.
Some states seek greater autonomy in shaping GST policies, expressing concerns about the decision-making process in the GST Council.
It is ONE NATION ONE TAX only on paper and not in a practical sense due to the presence of multiple tax slabs.

Key Responsibilities: Recommends tax rates, period of levy of additional tax, principles of supply, exemption thresholds, and special provisions for states.
Constitutional Mandate: Established under Article 279A of the Constitution to administer and govern GST.

Chaired by the Union Finance Minister, with state government-nominated ministers as members.
The center holds 1/3rd voting power, while states collectively hold 2/3rd.
Decision Making: Decisions require a 3/4th majority, ensuring consensus among members.
Dispute Resolution: The council devises mechanisms for resolving disputes arising from its recommendations.