What’s the news?
December 2020 GST Revenue collection was the highest ever and stood at Rs 1.15 Lakh Crore, up 12% from the same month last year.
What does this mean?
GST revenues during December 2020 stood at Rs 1.15 Lakh crore. It’s the highest since the introduction of GST. The December numbers are reflective of economic activity in the previous month. The Increased GST collection is the clearest sign of economic recovery.
The revenues for December 2020 were 12% higher than the GST revenues in the same month last year. During the month, revenues from import of goods were 27% higher and the revenues from domestic transactions were 8% higher than the revenues from these sources during the same month last year.
The GST collections have shown positive growth since September. While GST revenue in September could not cross the Rs 1 lakh crore benchmark, it still saw a 4% growth to Rs 95,480 crore that month compared to a year ago. Revenue collection in October saw an impressive 10% year-on-year growth to Rs 1,05,155 crore. And collections in November also saw a 1.4% year-on-year growth to Rs 1,04,963 crore.
Festive sales in November and restocking by retailers ahead of Diwali festivities could have also resulted in the bumper collection during December.
The increase in the GST collections on imports indicates that international trade is coming back to normal. Further, the implementation of the e-invoicing system since October 2020 also contributed. The system curbs fake invoicing and input tax credit menace to a greater extent.
How does this affect your wealth?
The increase in collections is a clear indication of the recovery of economic activity. The revival of the economy will lead to better performance of companies and it will reflect on your investment performance.