The June GST collections have brought confidence back in the government's revenue department that not only indirect tax collections in FY22 may remain closer to budget targets but also that fiscal deficit may finally be contained as per projections.
As per estimates made by Kotak Institutional Equities, as GST collections for FY22 are budgeted at Rs 13.1 lakh crore (Rs 5.3 lakh crore as CGST, Rs 1 lakh crore as compensation cess and Rs 6.8 lakh crore as SGST), it would warrant a required monthly run rate of Rs. 1.1 lakhs crore.
This looks highly likely given the performance of GST in the first three months of the year. Gross GST collections in 1QFY22 were at Rs 3.4 lakh crore, 7.3 percent higher than 1QFY20. The pick-up in the e-way bill has given another indicator that economic activity is returning back to normal.