What does this high GST number mean for the Indian economy? Are these GST collections sustainable? And what is the way forward for one of the biggest tax reforms India has ever seen? In this week’s episode of TOI Business Bytes, we try to give you the answers to these important business questions.
GST levies at record highs explained: What it means for the Indian economy | GST reform
According to the Ministry of Finance, the gross GST revenue levied in the month of April 2023 amounted to Rs 1,87,035 crore. Of this Rs 38,440 crore was the Central Goods and Services Tax (CGST) and Rs 47,412 crore was the State Goods and Services Tax (GST). The Integrated Goods and Services Tax (IGST) amounted to Rs 89,158 crore.
In the video above, Yuvika Singhal, economist at QuantEco, explains why April saw record GST data and why May is likely to paint a more realistic picture. She also expresses optimism that the continued growth in GST numbers is a reflection of the domestic economy’s strong history amid the ongoing global economic turmoil.
Yuvika talks about the importance of compliance and tax evasion control and commends the Center for taking proactive steps to close the gaps. She also notes that the GST Council has played an important role in streamlining GST rates, which has helped resolve compliance issues. She believes that going forward, states will also need to take a deeper look at GST evasion.
Watch the video above to learn how India’s GST reform compares to indirect tax collection mechanisms in major developed economies and why India should aspire to eventually transition to a single tax rate system.