GST collections increased by over 70% in four years in AP
Visakhapatnam: Andhra Pradesh collected 25,331 crore as goods and services tax revenue in the 2018-19 financial year, averaging a GST revenue of 2,100 crore monthly. The state is currently realizing an average of 3,500 to 4,000 crore monthly GST collections.
Andhra Pradesh posted 4,329 crore in revenue in April, the highest-ever collection for any month since the inception of the GST regime. The numbers have not dropped below the 3,500 crore mark for any month in the ongoing 2023-24 financial year. This translates to over 70% increase in monthly collections.
The GST statistics are considered as a high-frequency indicator to gauge consumer demand and growth. For instance, during the height of the COVID-19 pandemic, the monthly collections plateaued around 2,500 crore for Andhra Pradesh both in 2020 and 2021. The economic shutdown and the output losses, particularly during the prolonged lockdown period, kept the GST numbers far below the projected ones.
The state showed early signs of an economic recovery in 2022 as was the case with the receding Covid-19 pandemic. The GST collections surged past the 3,000 crore mark throughout 2022. This further increased to over 4,000 crore mark in 2023.
Prof Choudari Appa Rao, former economics professor of Andhra University, said the increased GST collections translate to increased inflows into the state in the form of SGST. “There were several modifications in tax rates pertaining to various products, particularly in the segments of commonly-used products, medications, handicrafts, etc. over the years. The indirect tax reform has also increased tax compliance. While GST collections serve as a basis to understand the consumption levels, this also points to the fact of growing spending power of people of the state,” he said.
State Finance Commission member Dr M Prasada Rao said GST collections partly reflect spending in the rural parts of the state from income generated through agricultural produce. “GST regime has broadened the tax base, extending it to the rural economy,” said Dr Rao.
GST consists of two components — one is central goods and services tax, and the other one is state goods and services tax. They are levied and collected by the Centre and the state, respectively, on every transaction of intrastate supply of goods and services. Further, GST is a destination-based tax in contrast to the erstwhile origin-based taxes. The taxes collected on goods and services in the value chain finally accrue to the goods and services consuming the states.