Editorial: Economy On A Roll, Record GST Mop-Up

Editorial: Economy On A Roll, Record GST Mop-Up

FPJ EditorialUpdated: Wednesday, May 01, 2024, 09:49 PM IST
article-image
Representative Image | File

There is more good news on the economic front. Indicating good overall health of the economy, the Goods and Services collection in April, the first month of the 2024-25 financial year, for the first time breached the psychologically important milestone of Rs 2 lakh crore. According to the latest data released by the Union Ministry of Finance, the April collection totalled Rs 2.10 lakh crore. This was an increase of 12.4% over the same month last year. There was a robust rise in domestic transactions which grew by 13.4%, and imports which grew by 8.3%. The ministry said that the net revenue after refunds amounted to Rs 1.92 crore, a 17.1% growth compared to the corresponding month in the previous financial year. The full year collection of GST in 2023-24 was Rs 20.18 lakh, an 11.7% increase over the previous year. The average monthly collection last year was Rs 1.68 crore as against 1.5 crore in 2022-23. Expectedly, Maharashtra accounted for the highest collection among all States at Rs 37,671 crore, followed by Karnataka which generated Rs 15,978 crore, and Gujarat adding Rs 13,301 crore to the April kitty.

Another notable fact was that for the very first time UP beat Tamil Nadu, contributing Rs 12,290 crore to the GST collection while Tamil Nadu yielded Rs 12,210 crore and Haryana Rs 12,168 crore. Launched in July 1, 2017, the GST collection in the first year of its launch averaged about Rs one lakh a month. These had seen a steady increase over time, crossing the Rs 2-lakh-crore mark last month. Despite initial controversies and online hiccups, the GST system has worked well in recent months. There were few complaints from the users while the service provider has exerted to further ease the customer experience. The uniform nation-wide tax which subsumed a number of central and State indirect taxes on goods and services, barring mainly those on liquor and petroleum products, has decidedly led to smoother revenue collections and a greater ease of doing business than was the case in the pre-GST years. While avoiding the cascading effect of indirect taxation, the GST has largely helped prevent tax theft and led to an expanded tax base. The tax authorities most candidly acknowledge that not only the theft of taxes has become difficult under GST but the fear of detection of theft and the consequent penal action has also led to greater compliance. The digitization of the entire financial system too has made evasion of tax harder.

Given the fact that the crossing of yet another landmark in GST collection would be a major talking point on the nightly television shows, and in the next day’s newspapers, we would not be surprised if the Opposition smelled a rat, questioning whether the announcement of record collection was timed to influence the voter. The usual suspects in the Congress party who cry foul against the alleged breach of the Model Code of Conduct without batting an eyelid may well consider a trip to the Election Commission for complaining against Finance Minster Nirmala Seetharaman. Admittedly, the good news ought to impress the independent-minded voters about the continuing good health of the economy. We fail to see how the normal functioning of the government can qualify as a breach of the election code. It was no policy decision disclosing the actual tax collection like every month. It is part of the ongoing process of the central administration and no cavil ought to be raised. Nor should the Opposition belittle the decent growth of the economy which the latest GST collection underscores. Of course, it is a given that there remains a tremendous scope for further growth, for further refining the system to ensure an equitable and fair levy on goods and services. The criticism that in effect half of the GST is paid by the poor ought to lead to a deeper study as to how to lessen their burden. The vast income disparities ought not to be further aggravated by a taxation system which makes no distinction between the wealthy and the poor. It is a challenging task but needs to be addressed nonetheless.

RECENT STORIES

Editorial: A Tale Of Two Contests

Editorial: A Tale Of Two Contests

Water Crises And Political Promises: A Tale From Rural Maharashtra

Water Crises And Political Promises: A Tale From Rural Maharashtra

BJP Looking To Calibrate Its Maharashtra Strategy For Assembly Polls

BJP Looking To Calibrate Its Maharashtra Strategy For Assembly Polls

Editorial: Rhetoric Won’t Suffice In Manipur

Editorial: Rhetoric Won’t Suffice In Manipur

Goodbye Rahul, Hello Priyanka

Goodbye Rahul, Hello Priyanka