GST revenues in July jumped to Rs 1.16 lakh crore, the second-highest collection for the fiscal in a sign of economic revival as states relax their coronavirus restrictions.

The data showed the collections grew 33 per cent year-on-year to Rs 1,16,393 crore against Rs 87,422 crore in July 2020.

The finance ministry said the spike in the collections in the goods and services tax (GST) “clearly indicates that the economy is recovering at a fast pace. The robust GST revenues are likely to continue in the coming months too”.

Central GST accounted for Rs 22,197 crore in July and state GST collections were at Rs 28,541 crore. While integrated GST collections stood at Rs 57,864 crore in July, including Rs 27,900cr from imports, that from cess was Rs 7,790 crore, including Rs 815 crore from imports.

The collections in April had hit an all-time high of Rs 1.41 lakh crore. They fell to Rs 1.02 lakh crore in May and further below the Rs 1-lakh-crore mark at Rs 92,849cr in June, before the rebound in last month.

“In our view, this is further evidence that the graduated unlocking in June has triggered an incomplete recovery, which is expected to strengthen in July 2021, further boosting the August collections. The pace of growth across the states was highly uneven in July, with some industrial heavyweights recording a sharp expansion,” Aditi Nayar, chief economist, Icra said.

Deloitte India senior director M.S. Mani said the “sharp increase in the collections indicates the resumption of economic activities in June and will raise expectations of better collections in the coming months. “

“The improvement in GST collections both on domestic transactions and imports, accompanied by the fact that major producing states have shown significant increases, would indicate that the economic activities have resumed across the country.”

EY tax partner Abhishek Jain said the collection was a definite indicator of economic recovery and the uptrend was expected to continue in the coming months.

Shardul Amarchand Mangaldas & Co partner Rajat Bose said collections were higher on the back of economic revival in June.

“If the country is able to resist the third wave, the GST collections should increase from here on,” he said.

The GST collections in July 2021 are primarily for supplies and sales made in June when the states were easing the lockdown restrictions. In April and May, most states were under different levels of lockdown, which reduced business activity.